Bonds are over-owned to the point that they have become dangerous investments, Gramercy Capital Management CEO Joan Lappin told CNBC on Thursday.
“It seems to me that for 30 years, it was hard to buy bonds and lose money. And that’s what people have been conditioned to believe. The last decade was terrible for them in the stock market, so they’ve rushed to bonds,” she said on “Fast Money.” “Bonds are over-owned.”
The investment vehicle was gaining ground in new areas, she said.
“It’s hard companies to get an IPO out the door, but they’re selling bonds like there’s no tomorrow. Now, at some point, this is going to reverse. It should’ve reversed already, but I don’t think the Fed knows what to do,” she added. “Last Friday, they told us not until 2015.
“Bonds should’ve been dangerous already, but they haven’t been, and now they’ve said you’ve got another two years or three years before they become.”
Trader disclosure: On Sept. 20, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Dennis Gartman is long AUD; Dennis Gartman is long CAD; Dennis Gartman is long GOLD; Dennis Gartman is short Euro; Dennis Gartman is short Yen; Dennis Gartman is short Crude Oil; Dennis Gartman is short SOY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Weiss is long T; Steve Weiss is long VZ; Steve Weiss is long VOD; Steve Weiss is long AAPL; Steve Weiss is long TOT; Steve Weiss is long HK; Steve Weiss is long AIG; Steve Weiss is long BAC; Steve Weiss is long BBT; Steve Weiss is long QCOM; Steve Weiss is long MTGE; Steve Weiss is long CINY; Steve Weiss is long AMTG; Steve Weiss is long M; Steve Weiss is long EUO; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long DD; Stephanie Link is long NKE.
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