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”The bond market is the most important market in the world. It is the backbone of all other markets.” – Ray Dalio, founder, Bridgewater.
A recent Financial Time piece on bonds [link] reminded us of their long, proud history as well as their critical importance to the proper functioning of today’s global markets. The article points out that while banks have faded in importance as holders of capital, bonds – led by US Treasurys – are major components of the world’s financial system.
Size-wise, the total bond market at $133 trillion (per BIS) is smaller than the $181 trillion global banks represent, according to the Financial Stability Board. But as part of the “shadow banking” system, it is having an impact on how policy makers view regulation...
✎ From the Editor: The Lead Left will be on its annual August break and will return the week of Sept 4.
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