Say a little prayer (for bonds)

July 30, 2015 08:54 AM

I’m not what you would call a “prayerful” type of guy.

Even at 30,000 feet, when the air gets rough, I never invoke the “God” word, settling instead for promising myself that if I ever get back to terra firma, I will never fly again, which I promptly forget days or even hours later. It’s not that I’m a non-believer in prayer’s ultimate destination, but more of a cynical take on why the Lord would hand out party favors to everyone that asked, or to those that asked most intently.

I do remember praying nightly as a child though, which might indicate that my mom and dad were better parents than I have given them credit for. I recited the Lord’s Prayer, then followed it up with the standard “God Blesses” – in my case “God Bless Mommie, Daddie, Chip, Lyn, Mamie, Budgie, Brenda, Stinky and everyone in the whole world.” Stinky was my brother’s cat, so named because she used the house as her personal litter box in the days before my parents could buy one at the local “five and dime.” Brenda was the neighbor’s bulldog but warranted a mention ahead of our own Stinky because – well – she didn’t smell. Funny how we prioritize our prayerful moments.

Funny, too I think, about how I learned two different versions of the Lord’s Prayer: one – the Protestant litany – spoke to “forgiving our debts as we forgive our debtors”; the other – maybe a more traditional Catholic influenced version – substituted “forgive our trespasses as we forgive those who trespass against us.”

The differences never much bothered me as I prayed less and sinned more into my teenage years, but later I got to thinking about it as I entered the bond market and began to contemplate the odds of paying and being paid, or trespassing and being trespassed against with other people’s money. Given a chance, I thought I would infinitely prefer forgiving a trespasser as opposed to a debtor.

Debtors didn’t necessarily belong in a prison but then they didn’t belong in a prayer either, where forgiveness was akin to abrogation, default, and not getting your good old fashion money back! Over the following years then, my own kids got stuck with “trespasses” instead of “debts” even though I eventually realized – as do you, my more prayerful readers – that they are meant to convey one and the same thing.

Still, as I wound my way through my bond career, and the inevitable Penn Centrals, Continental Banks, and Lehman Brothers of this business, I had frequent moments of silence, if not teensy prayers, that gave thanks to the Lord for getting most of my (your) money back. Like bumpy air at 30,000 feet though, the next day I was flying again in the bond market but with a slightly firmer grip on the wheel. Life just seems to go that way.

Quote Image August 2015 Bill Gross

Speaking of bumpy air, trespassing, and the forgiveness of debt, the Greek/German tragedy of midsummer seems to have landed on terra firma for at least a few months—although inevitably the weakness of the Eurozone with its common currency, but disparate fiscal philosophies, spells renewed turbulence in financial asset markets. The Eurozone – and the Eurounion itself as Britain’s 2017 referendum may eventually reveal – is a dysfunctional family and may always be.

Examples:

1. Germany vs. France
2. The Balkans
3. Southern peripherals
4. The more stoic Nordic countries.

They are all so different that a common purpose seems to be missing. Perhaps that purpose if summed in three words might be “Peace and Prosperity” but while the peace seems to be assured by German passivity and the military blanket of NATO, prosperity is a subject of conflicting views as to which policies lead to long term growth.

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