Word: bonding
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Dates: during 1980-1989
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...discount rate to member banks drove home the point. As the money supply expanded and interest rates fell, Wall Street bought Volcker's act. Beginning in August, the Dow Jones industrial average staged a 288-point rally that peaked in early November, and the bond market boomed with...
When it comes to making big money quickly, thoughts of investing in bonds have not traditionally leaped to mind. Then came the summer of 1982, when declining interest rates gave the nation's $2.3 trillion bond market a spectacular liftoff, making born-again believers out of a generation of battered bondholders...
...hardly had 1982's bond market bulls had a chance to tot up their winnings when much of the euphoria that accompanied the rise in bond prices began to fade. Prices have begun to weaken ever so slightly, and interest rates have started to nudge upward. Reason: fear is spreading that inflation, a mortal menace for all fixed-income investments, could resume with a vengeance if the economy comes out of its doldrums. Says Raymond Dalio president of Bridgewater Associates Inc., a Connecticut-based economic and investment consulting firm that was strongly bullish on bonds last winter and spring...
Alan Greenspan, a consultant who was President Ford's chief economic adviser, argued that while the Reserve Board might be able to reduce short-term interest rates, it could do little to bring down the high rates (12% or more) on long-term corporate bonds. Bond buyers fear that a too rapid expansion of the money supply by the Federal Reserve could eventually reignite inflation. As a result, they demand high interest as protection against rising prices. But until bond rates come down, companies will continue to restrain their capital spending. After the cut in the discount rate last...
...recession from turning into outright depression, investors surged into the market, sending the widely watched Dow Jones average of 30 industrial stocks on the most explosive upward ride in Wall Street history. By last week the Dow stood at 1012, a 30% climb from its summer low of 777. Bond prices also soared, with 30-year Treasuries climbing some 32% during the year...