financial markets saw the war of 1914–18 coming, we should expect to see declines in bond prices or rises in bond yields {since the yield is essentially the interest paid on a bond divided by its market price}.
In Niall Ferguson's work, "The Abyss: World War I and the End of the First Age of Globalization," the author suggests that financial markets are often prescient, as evidenced by their expectations leading up to significant events like the First World War. Ferguson highlights how market dynamics can signal impending turmoil, particularly in relation to bond prices.
According to Ferguson, if markets anticipated the outbreak of war, it would likely result in declines in bond prices or increases in yields. This is because the yield on a bond is calculated by dividing its interest payments by its market price, indicating that investor sentiment around risk and uncertainty directly influences market behavior, shaping the financial landscape during critical historical moments.
Rate the Quote
User Reviews
Other quotes in The Abyss: World War I and the End of the First Age of Globalization-A Selection from The War of the World
Other quotes in book quote
All the things you can talk about in anyone's work are the things that are least important.
Race of Cain, ascend to heaven, And cast God down upon the earth!
