The Evolution of a Bond
FROM VERBAL IOU TO ELECTRONIC ENTRY
Bonds are negotiable or salable loans, and there is a ready marketplace in which to trade them—a big advantage for investors. In 1704, England passed a law making loans negotiable. Today, bonds can be traded like wheat and pork in the commodity markets. The bond markets are called the credit markets, the place where governments and corporations come to gather money to fund their dreams. Formerly the province of bankers and kings, these markets are now open to everyone.
Learning the Language
To fully understand the bond markets, it helps to know why they exist as they do. And while it is true that bond brokers speak English, they use expressions that act as shorthand, creating ...