Matching sellers and buyers in the secondary market is the hallmark of a healthy, liquid bond market.But nowadays with the attraction of financial market making huge money or in other words a person without any financial background can make money with the help of a bond manger or simply following the trend.More and more people starts to buy bonds and enter the financial market.Actually this will led to huge influence of the financial market because a rumor might cause huge decline demand of a typical bond.The vice chairman of Loomis Sayles & Co Dan Fuss said that:“I think it is a very good time to be cautious… You have growing geopolitical risks and you have shrinking incentives to invest.”Due to wars and war rumors the credit is rising and therefore bond yields are falling which might not be able to provide people a stable income but since so many people are in the bond market now it is a real big issue.This also put up the liquid premium.

Since yield has drop so much,this led to 2 situations.One is the bond trade decreased,The second is it cause some investors starting to buying the junk Bonds.

In my view people are buying some risks that they aren’t familiar with which is a huge danger,Even thought the investors might be rich but there influence will harm the market.Once the yield curve starts to shift upwards this will led to a crisis.Therefore in order to increase the trade of bonds but lower the yield,Governments should keep on with QE 2 which pulls down the longer time risky bond and this might drive people back to buying the short term bonds with more liquidity.

http://stream.marketwatch.com/story/markets/SS-4-4/SS-4-72085/