By Paul Vigna for MoneyBeat at The Wall Street Journal, 18 February 2014
Everybody knows William Shakespeare, the great English playwright. What we don’t know is William Shakespeare, the great bond trader. That’s because he missed out on a historic chance to make money playing the bond market, a new study found. Josh Zumbrum wrote about it for Real Time Economics, and dropped in on the MoneyBeat desk to talk about it.
The study, from the Bank of England’s Andrew Haldane, looked at interest rates dating back to 3000 BC, and found something interesting: the yield curve – or, the difference between short-term and long-term rates – in Elizabethan England during Shakespeare blew out to nearly 10% – the widest curve in history, according to the data. So, if the Bard had been aware of playing an arbitrage game, he could have cleaned up in the bond market.
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