EDITORIAL: Ignoring bond markets risky
The problem is that the market is now so huge that even small changes could have dramatic effects
Few ordinary people around the world really appreciate the significance of the bond market, so suggesting that a profound sea change is about to take place in the market is likely to garner as much excitement as watching paint dry. And yet, in many ways, the bond market rules our lives. American political adviser and key member of Bill Clinton’s first presidential campaign James Carville once remarked: "I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody." That was way back in 1993. Carville would be astounded now. The global bond market has more than tripled in size in the past 15 years and now exceeds $100-trillion. That’s a good 40% larger than the total value of global stock markets. The US bond market is roughly twice the size of the country’s stock market. This development has been driven by one of the most remarkable shifts in glob...
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