Congress Bickers, Bond Markets Brace for Panic: William D. Cohan

July 19 (Bloomberg) -- Hold on for just a New York minutenow and consider the powerfully serious message the bond marketsent last week about the political dithering in Washington andin Europe’s capitals. “Pay attention folks,” as the investorGifford Combs e-mailed me on Friday. “This is not a drill.”

Here are the facts: The yield on Greek sovereign debt isnow at record highs for the euro era. Last week’s state-managedbond auction in Italy almost failed. And, while few seem to havenoticed, the overnight repurchase market -- for short-term,secured, corporate debt obligations -- nearly seized up amidwhat Combs described as “an almost panicky scramble” for less-risky paper.