Poczytajcie sobie artykul weterana. Opisuje on katastrofe na rynku dlugu
rzadowego. Jego poglad jest pi razy drzwi dokladnie taki jak moj. Rynek
obligacji rzadowych w USA zawali sie lada moment. Jesli znacie osobiscie
kogos, kto ma takie obligacje - to przekazcie mu artykul i wyrazy uszanowania.
Bo to nie jest pytanie CZY obligacje spadna, tylko KIEDY teobligacje spadna.
Polska ma ich obecnie 13.9 miliarda dolarow.
Don’t underestimate the power of rising interest rates to change your
financial future. Don’t assume they will stay relatively tame or that the
Federal Reserve can keep them under control.
Above all, don’t forget the painful lessons of history — when millions of
investors made similar assumptions, ignored the handwriting on the wall, and
lost fortunes as interest rates surged.
THE BOND MARKET CRASH OF 1979-80
Two weeks ago, I told you my father’s story about the early 1930s — when bond
markets collapsed unexpectedly and interest rates skyrocketed out of control.
This morning, let me tell you mine.
The time was late 1979, and, geographically speaking, I couldn’t have been
farther away from the U.S. bond markets: I lived and worked in Tokyo. In every
other respect, however, I couldn’t have been closer: I had joined Wako
Securities, Inc., one of Japan’s top-ten brokerage firms, and my job was to
write a bi-weekly newsletter dedicated to the very subject of my e-mail today
— U.S. and other bond markets. Who were my subscribers? Mostly decision-makers
and traders at major Japanese life insurance companies and property-casualty
companies. Why were they so interested in foreign bonds? The answer goes back
to the great Tokyo earthquake of 1923, which devastated Tokyo and Yokohama,
taking 140,000 lives and causing property damage in excess of one billion U.S.
dollars at the time. The earthquake also devastated both life and property
insurance companies in Japan, and the financial authorities never forgot the
experience. So, ever since, to hedge against another “big one,” Japan’s
Ministry of Finance has insisted that its insurers keep at least some of their
assets abroad. That’s why foreign bonds, especially U.S. bonds, were so
important, and why my Japanese newsletter on the subject was so vital.
At the time, Elisabeth and I lived in Ochiai, a quiet, tree-lined neighborhood
about 20 minutes by subway from downtown Tokyo.
To beat the morning rush hour, I’d often wake up at 5 a.m., taking the Tozai
line straight to Kayabacho in the financial district, just one block from the
My Japanese co-workers thought they were the only ones who worked long hours.
They were surprised to see a gaijin arrive for work even earlier than they
did. But I needed the quiet time in the war room of Wako’s International
Department to sift through overnight market information that came from wire
services and from the firm’s branches in New York, London, Zurich, and Hong Kong.
There was no e-mail or Web in those days. But oversized fax and telex machines
poured out streams of paper that piled up in messy heaps on the floor. From
these — and from my frequent meetings with Japanese bond traders and
institutional investors — I kept a daily diary of key events. Here are some
TOKYO, OCTOBER 1, 1979. The dollar has taken a huge beating in the last few
years, and now new inflation fears are sweeping the globe. Our clients —
Japanese insurers, pension funds, trusts, and banks — are loaded with U.S.
bonds, and they tell me they’re getting very nervous.
In the first issue of my Gaikoku Saiken Nu-zu (Foreign Bond News), I warn them
of a severe bond market decline ahead. I tell them to stick with the dollar,
but to switch from long-term to short-term maturities.
Meanwhile, on the other side of the globe, the newly appointed Federal Reserve
Chairman, Paul Volcker, has just flown to Belgrade for the annual convention
of the International Monetary Fund.
Our company’s president is attending, and a fax from our London office says
Volcker is coming under intense pressure from West European and Asian central
bankers to do something — anything — to cut inflation off at the pass.
If he doesn’t take action, say the delegates to the convention, there will be
a new dollar collapse — one that will make its recent decline look like a
picnic by comparison.
WASHINGTON, OCTOBER 6, 1979. Chairman Volcker has departed early from Belgrade
for round the clock meetings with Administration officials in Washington. He
has just announced the greatest interest-rate bombshell of the century:
* He’s raising the discount rate by TWO full percentage points!
* He’s imposing stiff controls on foreign borrowings by U.S. banks.
* Most important, Volcker is making a radical policy break with the past: From
now on, the Fed will cease manipulating interest rates directly. Instead, it
will go back to the old principle of controlling the amount of money flowing
into the economy.
I’m visiting several of Japan’s largest insurers this week, and they want to
know what this means.
My response: “The U.S. Federal Reserve has given up trying to hold down
interest rates artificially. From now on, the American central bank will let
interest rates rise to WHATEVER LEVEL IS NECESSARY to save the dollar and
NEW YORK CITY, OCTOBER 11, 1979. Fed Chairman Volcker apparently didn’t
realize the bond market was a giant bubble. Nor did he realize that his
actions of just five days ago would burst the bubble and cause an all-out
panic in the bond markets.
Just in the past four days, the price of a 30 year U.S. Treasury bonds has
plunged four full points. A $1 billion IBM issue — hailed weeks ago as a
brilliant piece of corporate finance — is now being described by Wall Street
analysts as “the greatest underwriting fiasco of all time.”
TEHERAN, NOVEMBER 4, 1979. Iranian students have just seized the U.S. Embassy.
Fears of a new energy crisis — and a new wave of inflation — are sweeping the
KABUL, CHRISTMAS 1979. The Soviets have invaded Afghanistan.
NEW YORK, JANUARY 1980. Concerns about a wider, longer war, plus an unexpected
spurt in consumer price inflation, are sending bond markets into a nosedive.
Will it be as bad as the October collapse of last year?
NEW YORK, FEBRUARY 5, 1980. It’s cold in Tokyo, and I’m waking up a bit later
in the morning. The subway is packed with commuters, and at each downtown
station, whenever there’s a mad rush for the exits, my thoughts turn to the
mad rush out of the U.S. bond markets.
Indeed, yields on longest term U.S. Government securities have just broken
through the 11% level — the all time peak reached during the Civil War.
“Faced with a prolonged buyers’ strike,” one seasoned pro tells the Wall
Street Journal, “we decided to throw in the towel and get yields up to a level
where some cash buyers might be shocked off the sidelines.” But even at 11%,
most investors aren’t interested.
Wall Street believes that the Afghanistan invasion and the resulting
inflationary fears are the causes of the collapse.
But in a speech to fellow analysts at our firm, I explain those are just
iiwake — excuses. The real, underlying cause of the bond market collapse is
the BOND MARKET BUBBLE — the fact that there has been a speculative boom in
bonds, similar to the stock market boom of the 1920s.