I was born on July 26, 1946, under a bond-bearish star. As my twin brother and I were carted home from the hospital, long Treasurys were priced to yield 2 ¼ percent. It was the third month of what would prove to be a 35-year bond bear market. I compose this, my life story, in the 33rd year of a bond bull market. My wife, Patricia Kavanagh, M.D., and I live in Brooklyn. We have four grown children and one grandson.
I came late in life to the work of interest-rate observation. In boyhood, at various intervals, I wanted to become a first baseman, naval officer, dairy farmer and French horn player. I don't say that interest rates and monetary affairs never entered my mind, but they rarely pushed their way to the front of it. I had a passbook savings account that paid, I think, 4 percent interest; I remember that no one seemed to think it unusual that real silver coins circulated from hand to hand. I grew up in Williston Park, New York, in the middle of Nassau County on Long Island. By the time I was 18, the bond bear market - the one that had started in 1946 - was beginning to get its legs. I was in the Navy by then, an ordinary sailor, a gunner's mate, not an officer. I returned to college, from which I had dropped, in my 21st year. I studied economics at Indiana University, and I worked summers on the bond desk of McDonnell & Co., a New York Stock Exchange member firm; long Telephone yields made news when they punched through 6 percent. The Bretton Woods monetary system creaked and groaned. My first real job was on the Baltimore Sun. I was a year into the cub reporter's round of fires, crime news and obituaries when a slot opened up on the financial desk, then under the editorship of an amiable southerner named Jesse Glasgow. It was 1974, and nobody else wanted the job. I myself was lukewarm, business and financial writing not then being the journalistic acme of splendor it subsequently became. I remember talking to a local college professor as the S&P 500 was settling into what would turn out to be its generational lows. He said that it was futile to try to second-guess the market because prices instantly incorporated all relevant information. I came to see that markets are not one jot more detached or coldly calculating than the emotional people who inhabit them. This insight came to me at Barron's, the staff of which I joined in 1975. Bob Bleiberg and Alan Abelson, editor and managing editor of that esteemed Dow Jones weekly, knew too much about markets, and about investors, to fall for the then-trendy efficient markets hypothesis. On the totem pole of prestige within financial journalism, the fixed income markets were then very close to ground zero. Barron's had no full-time bond columnist until I volunteered for the job in 1979. By then, interest rates had become big news. So, too, had the post-Bretton Woods dollar, which, unballasted by anything but the expressed good intentions of the Carter administration, was fast losing value. Before long, government securities were priced to yield 10 percent, a rate of interest last seen during the Civil War. Wall Street was in crisis. Journalistically, it was very heaven. In 1983, I decided that what Wall Street needed was something else to read. It would be a twice-monthly journal on interest rates, the financial markets and monetary ideas. Within 12 pages, it would deliver the best investment ideas expressed in the finest prose and ornamented with the funniest cartoons. All for $200 per annum. So Grant's Interest Rate Observer came into the world on Nov. 7, 1983. Coincident with Vol. 1, No. 1 of Grant's was the publication of my first book, a life of the investor and political figure Bernard M. Baruch. I expected big things from this double launch - an outpouring of subscriptions to the one, rave reviews for the other. The reception rather resembled what Damon Runyon described as the "medium hello." In those early days I left a couple of dozen stamped and addressed copies of a brand-new editions of Grant's in the back seat of the taxi in which I had been riding to the post office. By the early spring of 1984, I was almost without funds to continue to publish, let alone to go swanning around Manhattan in taxicabs. Holman, who perhaps contracted a bit of my wife Patricia's infectious optimism. In any case, he invested what today would be counted a modest sum but then was, in the Grant's scale of things, a princely fortune. In any case, it was enough to set in motion the publication of what must be, by now, well over four million words. If I had to pick my favorite half dozen of this verbal outpouring, they would be the ones that, in three columns, hung over an article dated Oct. 20, 2006, about the coming crisis in credit. "Over the cliff with Morgan Stanley," our headline read. Early in 2012, amid the post-crisis shriveling of interest rates, the Federal Reserve Bank of New York invited some of its more nettlesome critics to blow off steam within the confines of the Fed's own faux Italian Renaissance palazzo on Liberty Street in lower Manhattan. I was among the honored invitees, and I closed my talk with an allusion to a publication that, like Grant's, was better known for its voice than for the size of its circulation. Do you remember, I asked my audience of central bankers, the Irish provincial newspaper that, at the turn of the 20th century, directed its disapproving attention at Czar Nicholas II of Russia, editorially warning that potentate, "The Skibbereen Eagle has its eye on you"? I trust they got my meaning. Grant's Interest Rate Observer has its eye on them.