Bloomberg.com has an interesting article in which it interviewed five bond market experts who are old enough to remember the last time we had an extended bear market in bonds, way back before 1982. They reminisce about what things were like when the bull market began. Younger people who have never experienced more than a few months of a bad bond market will benefit from reading, and others might be reminded of some things they forgot.
“Things were so different back then it’s unbelievable. The guy in the street didn’t have a clue who the central bank governor was. They weren’t rock-star celebrities like they are today. No one knew who Arthur F. Burns [Fed chair from 1970-1978] was. Paul Volcker is six-foot-seven tall, and when I saw him walking around in New York no one recognized him.
I remember the day when he came back early from the IMF meeting in Belgrade, Yugoslavia. That marked a turning point: he realized that in order to kill inflation, he had to hike interest rates like a shot. No one saw anything like that ever before, and no one believed him.