lisa abramowicz has been following this story. she joins me in studio.o investors care so much about junk bonds? >> they are bonds to the riskiest companies. historically, when junk bonds start to lose value, they can act as a canary in the coal mine. that is how some investors look at them. they can be a leading indicator. particularly, the etf. >> it is a relatively small market. >> it is. $1.6 trillion. you are talking about the u.s. high-yield market. that compares to $12 trillion u.s. treasury market. it is not that significant when it comes to that. however, this is a major part of our economy right now. the riskiest companies investing and growing with the economy, a scion of the health of the economy. >> who are these sellers? >> the etf has attracted a lot of institutions. mutual funds by etf's as a way of quickly getting into the market. you have individuals, retirees, you have them buying it as a way to also get access to a relatively liquid market. the selling seems to be pretty broad base. -- based. or twos not just one institutions. >> do t

also joining me, lisa abramowicz. the patients of bond investors, has it and rewarded? >> we have.ave been taught early in my career, you do not fight the federal reserve because you will lose. investors that have been fighting the bond market this year have not only been fighting the fed. they have been fighting the ecb, the bank of england. and the bank of japan. has gotten them. >> is this the fed's bond market? >> partially. with thelot to do coordinated an unconventional intervention you're seeing from all the other central banks. they are forcing government on yields down to lows in what i think is deliberate financial repression. >> isn't there a corollary dan -- damage here? there is a lot of concern this cannot last? is there a bubble? >> they're ultimately will be. if you look at the history of central banking, it seems to be in the business of manufacturing sequential bubbles. obviously, when you have the tremendous amount of liquidity being created, it will accumulate somewhere. what we have to do is identify the borrowers binging on the very cheap liquidity. to i think

join me to explain, lisa abramowicz of bloomberg news. investors keep on buying news, why?f you're going to retire , and you'ret thinking, where can i go to be safe? it used to be bonds. last year, everybody's idea of ons safety had turned on its head because everyone was expecting the ted to start tapering the stimulus and all the sudden find yields -- bond yields -- failedates rise, it is a investment. >> this year, they have done the opposite. they have gone back to those safe ons. the 10 year treasury has done very well this year. the investment corporate bonds funds have done very well this year. people are going back to the broad, index funds. people are saying, look, yes, we understand that fear. that was last year's fear about rapidly rising rates. this year, we don't see the potential for that happening as much. maybe this is the place to go. where else are you going to go? the thought processes for investors now, what are they saying, what does this mean, of their interpretation going forward? >> it is pessimistic. if you think about it, if you are expecting yield

to explain this new theory is lisa abramowicz. what is going on here?negatively and inversely correlated. initially people thought bonds would gain in times of turmoil and stocks would lose. in 2008 when the world was just gave u.s.ing, bonds 40% versus 30% plunge in the s&p 500. these asset classes are now moving together for the past couple of quarters. becauseought that was one market is wrong and the other market is right. we are asking investors, is the bond market smarter and typically people think of that way and it is showing there are real problems, for example, in geopolitics or is the stock market smarter shrugging these off and continuing to run? >> in income analyst for over 20 years has a different theory. he says it is not one is right and one is wrong, but both are responding to the stimulus that has been ongoing. it is both generating economic growth which is positive for stocks, suppressing yields on bonds. what could cause rates to rise? he said inflation. we don't see it right now. there's not a high degree of inflation. the ends --