{"product_id":"bonds-are-not-forever-isbn-9781118659533","title":"Bonds Are Not Forever","description":"\u003cb\u003eAn up-close look at the fixed income market and what lies ahead\u003c\/b\u003e  \u003cp\u003eInterweaving compelling, and often amusing, anecdotes from author Simon Lack's distinguished thirty-year career as a professional investor with hard economic data, this engaging book skillfully reveals why \u003ci\u003eBonds Are Not Forever\u003c\/i\u003e. Along the way, it provides investors with a coherent framework for understanding the future of the fixed income markets and, more importantly, answering the question, \"Where should I invest tomorrow?\"\u003c\/p\u003e \u003cp\u003e\u003ci\u003eBonds Are Not Forever\u003c\/i\u003e chronicles the steady decline in interest rates from their peak in the 1980s and the concurrent drop in inflation during that period. Lack explains how those two factors spurred a dramatic growth in borrowing among both governments and individuals. Along the way, Lack describes how a financial industry meant to provide capital needed to drive productivity and economic growth became disconnected from Main Street and explores the grave economic, social, and political consequences of that disconnect.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eProvides practical solutions for avoiding the risk of falling bond markets and guaranteed negative real returns on savings\u003c\/li\u003e \u003cli\u003eExplains how the bursting of the real estate bubble in 2007–2008 led to massive borrowing by governments as they attempted to offset a sharp fall in economic activity\u003c\/li\u003e \u003cli\u003eDetails how the trends of exploding debt and a financial sector that has grown much bigger than it needs to be have dramatically changed the game for savers\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eOffering a uniquely intimate, yet analytically thorough look at the coming fixed income crisis, \u003ci\u003eBonds Are Not Forever\u003c\/i\u003e is must reading for investment professionals, as well as retail investors and their advisors.\u003c\/p\u003e \u003cp\u003ePreface xi\u003c\/p\u003e \u003cp\u003eAcknowledgments xiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 From High School to Wall Street—The Bull Market Begins 1\u003c\/b\u003e\u003cbr\u003e \u003ci\u003eInflation Memories\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eAs Bad as It Gets 4\u003c\/p\u003e \u003cp\u003eTrading in Gilts 5\u003c\/p\u003e \u003cp\u003eThe Old Class Structure 8\u003c\/p\u003e \u003cp\u003eA Nineteenth-Century Market 11\u003c\/p\u003e \u003cp\u003eFinance Starts to Grow 12\u003c\/p\u003e \u003cp\u003eIs Finance Good? 16\u003c\/p\u003e \u003cp\u003eInvesting after the Bubble 20\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 A Brief History of Debt 23\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eInterest Rates in Ancient Times 23\u003c\/p\u003e \u003cp\u003eMedieval Credit 26\u003c\/p\u003e \u003cp\u003eThe Beginnings of Modern-Day Finance 28\u003c\/p\u003e \u003cp\u003eBorrowing Reaches the Mass Market 31\u003c\/p\u003e \u003cp\u003eStudent Debt 39\u003c\/p\u003e \u003cp\u003eBig Borrowers in History 43\u003c\/p\u003e \u003cp\u003eWhat We Owe Now 45\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Derivatives Growth 51\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWelcome to New York 52\u003c\/p\u003e \u003cp\u003eEarly Derivatives Growth 56\u003c\/p\u003e \u003cp\u003eSwaps Take Off 61\u003c\/p\u003e \u003cp\u003eSize Isn’t Everything 65\u003c\/p\u003e \u003cp\u003eDerivatives Reach Omaha 67\u003c\/p\u003e \u003cp\u003eNorwegian Wood 69\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Bond Market Inefficiencies for Retail 73\u003cbr\u003e \u003c\/b\u003e\u003ci\u003eA Simple Market Model\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eStocks Are Fairer than Bonds 76\u003c\/p\u003e \u003cp\u003eWhy Change Is Slow 79\u003c\/p\u003e \u003cp\u003eStructured Notes 81\u003c\/p\u003e \u003cp\u003eThe Internet Threatens the Swaps Oligopoly 84\u003c\/p\u003e \u003cp\u003eMunicipal Bonds 87\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Trading Derivatives 93\u003cbr\u003e \u003c\/b\u003e\u003ci\u003eBefore Banks Were Exciting\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eComputers and Swaps 96\u003c\/p\u003e \u003cp\u003eShould Banks Innovate? 97\u003c\/p\u003e \u003cp\u003eGrowth in Innovation 99\u003c\/p\u003e \u003cp\u003eVolcker’s Problem 102\u003c\/p\u003e \u003cp\u003eBring Me Clients with a Problem 103\u003c\/p\u003e \u003cp\u003eDerivatives Missteps 105\u003c\/p\u003e \u003cp\u003eTrading by the Book 107\u003c\/p\u003e \u003cp\u003eAn Options Book Blows Up 110\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Politics 115\u003cbr\u003e \u003c\/b\u003e\u003ci\u003eGovernment-Controlled Investing\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eWhy Should We Worry? 116\u003c\/p\u003e \u003cp\u003eWho Says There Is a Problem? 120\u003c\/p\u003e \u003cp\u003eLook to the Future 128\u003c\/p\u003e \u003cp\u003eLooking Ahead 129\u003c\/p\u003e \u003cp\u003eMonetization—A Thought Experiment 133\u003c\/p\u003e \u003cp\u003eImperial Overstretch 136\u003c\/p\u003e \u003cp\u003eMore Debt Means More Banking 141\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Managing Risk 1990–1998 143\u003cbr\u003e \u003c\/b\u003e\u003ci\u003eRisk-Oriented Market Making\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eTraders and Risk 145\u003c\/p\u003e \u003cp\u003eWhy Traders Are Bad at Budgeting 147\u003c\/p\u003e \u003cp\u003eThe Growth of Global Trading 149\u003c\/p\u003e \u003cp\u003eManaging Obscure Basic Risks 152\u003c\/p\u003e \u003cp\u003eWhat’s the Social Purpose? 155\u003c\/p\u003e \u003cp\u003eWall Street Fuels the Debt Growth 156\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Inflation 165\u003cbr\u003e \u003c\/b\u003e\u003ci\u003eA Brief History\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eGermany’s Defining Economic Experience 167\u003c\/p\u003e \u003cp\u003eInflation Today 170\u003c\/p\u003e \u003cp\u003eThe Fed’s Huge Mistake 174\u003c\/p\u003e \u003cp\u003eYou Can’t Spend Quality Improvements 177\u003c\/p\u003e \u003cp\u003eWhat Critics Say 181\u003c\/p\u003e \u003cp\u003eMeasuring What They Can, Not What Counts 183\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Bonds Are Not Forever 189\u003cbr\u003e \u003c\/b\u003e\u003ci\u003ePutting It All Together\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eWall Street Built It 192\u003c\/p\u003e \u003cp\u003eMake Your Own Bond 195\u003c\/p\u003e \u003cp\u003eHigh Dividend, Low Beta 198\u003c\/p\u003e \u003cp\u003eHedged Dividend Capture 201\u003c\/p\u003e \u003cp\u003eMaster Limited Partnerships (MLPs) 202\u003c\/p\u003e \u003cp\u003eDeep Value Equities 205\u003c\/p\u003e \u003cp\u003eDebt Is Bad 205\u003c\/p\u003e \u003cp\u003eBonds Are Not Forever 207\u003c\/p\u003e \u003cp\u003eReferences 209\u003c\/p\u003e \u003cp\u003eGlossary 215\u003c\/p\u003e \u003cp\u003eAbout the Author 219\u003c\/p\u003e \u003cp\u003eIndex 221\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eSimon A. Lack\u003c\/b\u003e has worked as a trader and hedge fund investor for more than thirty years. Following twenty-three years with J.P. Morgan, he founded SL Advisors, LLC, a Registered Investment Advisor, in 2009. Much of Simon's career at J.P. Morgan was spent in North American Fixed Income Derivatives and Forward FX trading, a business that he ran successfully through several bank mergers and culminated in his overseeing fifty professionals and $300 million in annual revenues. In addition, Simon Lack sat on J.P. Morgan's investment committee, allocating over $1 billion to hedge fund managers and founded the J.P. Morgan Incubator Funds, two private equity vehicles that took an economic stake in emerging hedge fund managers. Currently, Simon chairs the Investment Committee of Wardlaw-Hartridge School in Edison, New Jersey, and also chairs the Memorial Endowment Trust Investment Committee of St. Paul's Episcopal Church in Westfield, New Jersey. He is the author of \u003ci\u003eThe Hedge Fund Mirage: The Illusion of Big Money and Why It's Too Good to Be True\u003c\/i\u003e, which received high praise from the mainstream financial press, including the\u003ci\u003eEconomist\u003c\/i\u003e, the\u003ci\u003eFinancial Times,\u003c\/i\u003e and the\u003ci\u003eWall Street Journal\u003c\/i\u003e. Simon makes regular appearances on cable business shows as an expert on hedge funds and investing. He is a CFA charter holder.\u003c\/p\u003e  \u003cp\u003eIn his international bestseller, \u003ci\u003eThe Hedge Fund Mirage\u003c\/i\u003e, Simon Lack blew the lid off of the hedge fund industry, revealing why, despite their grandiose claims of record-breaking returns, the industry's chief beneficiaries have been hedge fund managers themselves.\u003c\/p\u003e \u003cp\u003eNow, in a book that is sure to become a finance classic, Lack shifts his focus to the fixed income markets to explain why, while fixed income may once have been a great investment, for the foreseeable future, investing in bonds could be hazardous to your financial health.\u003c\/p\u003e \u003cp\u003eBut before you can understand why bonds, long a reliable source of portfolio income, should be handled with extreme caution, it is important to know the full story of how we got here.\u003c\/p\u003e \u003cp\u003eInterweaving compelling, often amusing anecdotes from Simon Lack's distinguished thirty-year career as a professional investor with hard economic data, \u003ci\u003eBonds Are Not Forever\u003c\/i\u003e tells that story, identifying the forces that have shaped the financial sector over the past three decades. In the process, it provides investors with a coherent framework for understanding the future of the fixed income markets and, more importantly, answering the question, \"Where should I invest tomorrow?\"\u003c\/p\u003e \u003cp\u003eA story in two parts, \u003ci\u003eBonds Are Not Forever\u003c\/i\u003e begins by chronicling the steady decline in interest rates from their peak in the 1980s and the concurrent drop in inflation during that period. Lack explains how those two factors spurred a dramatic growth in borrowing among both governments and individuals. He relates how Clinton-era policies drove home ownership to historic levels leading to the real estate boom. And he explains how the bursting of the real estate bubble in 2007–2008 led to massive borrowing by governments as they attempted to offset a sharp fall in economic activity.\u003c\/p\u003e \u003cp\u003eThe other big story during this time was the explosive growth of financial services, as banks, brokers, and Wall Street, encouraged by the loosening of financial regulations, have come to claim an unprecedented portion of global GNP. Lack describes how an industry that was meant to provide the capital needed to drive productivity and economic growth became disconnected from Main Street and the grave economic, social, and political consequences of that disconnect.\u003c\/p\u003e \u003cp\u003eLack explains how those trends—exploding debt and a financial sector that has grown much bigger than it needs to be—have dramatically changed the game for savers, engendering an environment hostile to bond investors. And he provides practical solutions for avoiding the risk of falling bond markets and guaranteed negative real returns on savings resulting from a massive transfer of real wealth to those who have borrowed too much.\u003c\/p\u003e \u003cp\u003eOffering a uniquely intimate, yet analytically thoroughgoing look at the coming fixed income crisis, \u003ci\u003eBonds Are Not Forever\u003c\/i\u003e is must reading for investment professionals, as well as retail investors and their advisors.\u003c\/p\u003e  \u003cp\u003e\u003cb\u003e\u003ci\u003ePraise for\u003c\/i\u003e BONDS ARE NOT FOREVER\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\"Simon Lack, a former J.P. Morgan trader and money manager, advises investors to steer clear of U.S. Treasury bonds on the grounds that the government's indulgence in the age-old practice of inflating away debt makes a negative return likely. His book also offers an insider's account of the dramatic changes in international finance at a time when a global explosion in public and private debt was expanding the size, scope, and complexity of banking. Personal anecdotes, especially about the fast-paced trading of exotic 'derivatives,' make this book not only informative, but entertaining. It won't, however, relieve anxieties about the current fragile state of the global economy.\"\u003cbr\u003e \u003cb\u003e—George Melloan,\u003c\/b\u003e former editor and columnist, \u003ci\u003eWall Street Journal,\u003c\/i\u003e and author of \u003ci\u003eThe Great Money Binge\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\"This fascinating and prescient narrative of the bond market's past, present, and future will captivate both professional and personal investors. Peppered with anecdotes from Mr. Lack's four decades of experience in the financial markets, this book prepares financial stakeholders for an investing landscape that may look very different from what they have come to take for granted.\"\u003cbr\u003e \u003cb\u003e—Gabriel Hammond,\u003c\/b\u003e founder and Portfolio Manager, Oppenheimer SteelPath Funds, and founder, Alerian\u003c\/p\u003e \u003cp\u003e\"In \u003ci\u003eThe Hedge Fund Mirage\u003c\/i\u003e, Simon Lack exposed the appalling mediocrity of a hedge fund industry grown fat on investors' fees. In his latest book, he takes on the great thirty-year bond bull market, turning an insider's eye on how we got here and the risks that lurk in portfolios of supposedly safe debt.\"\u003cbr\u003e \u003cb\u003e—Dan McCrum,\u003c\/b\u003e U.S. Investment Correspondent, \u003ci\u003eFinancial Times\u003c\/i\u003e\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988850426085,"sku":"NP9781118659533","price":40.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118659533.jpg?v=1761781770","url":"https:\/\/k12savings.com\/products\/bonds-are-not-forever-isbn-9781118659533","provider":"K12savings","version":"1.0","type":"link"}