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ONE thing is certain this fall: there will be a lot of talk about taxes. But without a broad agreement, a series of automatic increases will take effect next year. What are investors to do? While there are still three months until Election Day, recent action in Washington did little to suggest the spirit of compromise is in the air. The Senate has voted to raise taxes on the wealthy, while the House has voted to keep taxes low for everyone. [ABSTRACT FROM PUBLISHER]

The Advance Auto Parts executives said the timing was right. The company wanted to capture more business by adding stores and expanding its fleet as motorists kept cars longer and needed more parts. So in January, looking at historically low interest rates and reassured by relative calm in the financial markets, the company issued $300 million in 10-year corporate bonds that pay investors 4.5 percent interest a year. [ABSTRACT FROM AUTHOR]

The swift rally in stock markets this year caught everyone's attention. But with far less fanfare, a frenzy has been taking place in the market for corporate bonds. When credit markets practically shut down last year, businesses had to pay huge premiums to raise money from investors, offering returns of 10 to 20 percent to anyone who would buy a company's debt. Now, investors are the ones paying higher prices as they race back into the bond markets, where companies and governments go to raise money for new projects and mergers, and to finance their daily operations. [ABSTRACT FROM PUBLISHER]

THE NEWS Investors wary of taking on any risk actually bid down the yield on short-term Treasury notes to zero and briefly even below zero, meaning they were paying more to buy the notes than they will receive in principal and interest when the notes mature. BEHIND THE NEWS You know the financial markets are deeply nervous when a guaranteed loss on three-month Treasuries is seen as a better idea than taking a chance on any alternative investment, from stocks to bonds to commodities to bank deposits. Economists worry that such caution could slow a recovery by choking off investments in stocks and corporate bonds that businesses need to finance their operations. [ABSTRACT FROM PUBLISHER]

The article discusses the effects of the rise and fall of stock prices in any Asian market on global finances. It states that the 9% fall of the Shanghai Stock Exchange in Shanghai, China, was due to investors opting for safer options like the U.S. Treasury Bonds. Higher return is the reason stated for investors investing in emerging markets and corporate bonds. It reflects on the effects of a loss in the dollar against the yen, on the risk based investments of pension and hedge funds.