Fund manager: US Treasurys not worth the risk

NEW YORK (AP) — The world's bond buyers have turned on Europe's deeply indebted governments and fled to another deeply indebted government across the Atlantic -- the U.S. As a result, U.S borrowing costs have plunged to historic lows while rising rates in Europe have many worried about a catastrophic financial crisis.

The European debt crisis has made the U.S. Treasury market the world's most popular spot for bond investors. But Kathleen Gaffney, co-manager of the $19.1 billion Loomis Sayles Bond fund, refuses to join them.

Gaffney concedes that over the course of a few months or even a year, it might look like a bad move. The Loomis flagship fund dropped 5 percent in the …