Contagion Rejected as Western Asset Buying Junk: Credit Markets

Michael Buchanan knew exactly what to do as markets were rocked in recent weeks on concern turmoil in developing nations from Argentina to China and Turkey would cause the global economic recovery to derail: buy junk bonds.

“A real dramatic freefall is unlikely in our opinion,” Buchanan, who oversees $127 billion of credit investments at Western Asset Management Co. in Pasadena, California, said in a telephone interview yesterday. “We were buyers on days of weakness over the past couple weeks.”