Bond Manager: Industry Doesn't Fear Subprime

AP

Shanghai Skyline

Will the latest subprime woes spread beyond the mortgage market? Sandy Rufenacht, a high-yield bond fund manager at Aquila Three Peaks High Income, appeared on “Street Signs” this afternoon to talk with Erin Burnett about why the riskiest bond market isn’t worried yet.

“We would need a full-on recession for junk bonds to take a hit,” said Rufenacht. However, he does not think the worst is over for homebuilders -- and wants nothing to do with them.

“If the Fed cuts rates, the stock market might rally 500 points and we could have a repeat of what’s happening now,” said Rufenacht, who believes the Fed should let us take the pain and not cut rates.