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After reading this article, I'm almost in tears when I realize what the mitigation step would have been for protecting those bearer bonds from moisture: Tupperw

After reading this article, I'm almost in tears when I realize what the mitigation step would have been for protecting those bearer bonds from moisture: Tupperware containers.

unabridged 14y ago
Yeah you would think these things would be in plastic folders like something used for a $20 baseball card. But there can't be that many left to cash, all of them have to be over 30 years old now which is one of the longest coupon lengths.
Maxious 14y ago
Self sealing comic book bags. $127.50 per 1000.
SilasX 14y ago
Or, you know, not storing large amounts of money in a long-obsolete financial instrument that you can't back up.
- Spooky23 14y ago
  Bonds are never obsolete. My dad knew a guy whose family owned some sort of bond with a 150 year maturity. It was used to build a long-defunct racetrack in the Bronx, and is now a NYC obligation. Is cutting out coupons a little silly? Sure. But the money is quite real!
  - patio11 14y ago
    If you think 150 years is a while, wait to you hear about perpetual bonds. The United Kingdom still pays out interest, four times annually, on bonds which predate the existence of the United States of America. (They could theoretically call most of them, but owing to unilateral changes in the terms over the years, the coupon is so low as to make calling them a losing proposition as opposed to paying down more conventional debts of the nation.)
    - ghshephard 14y ago
      Citation: http://en.wikipedia.org/wiki/Consols http://en.wikipedia.org/wiki/Consols (to save others the search) First issued in 1751. "Consols still exist today: in their current form as 2½% Consolidated Stock (1923 or after), they remain a small part of the UK Government’s debt portfolio. As the bond has a low coupon, there is little incentive for the government to redeem it. Unlike most gilts, which pay coupons semi-annually, Consols pay coupons four times a year because of their age. As a result of their uncertain redemption dates, they are typically treated as a perpetual bond. ... Given their long history, references to Consols can be found in many places, including literature such as Pride and Prejudice by Jane Austen, David Copperfield by Charles Dickens, Howards End by E. M. Forster, Vanity Fair by William Makepeace Thackeray, Of Human Bondage by William Somerset Maugham and The Forsyte Saga by John Galsworthy and in economics."
    - apaprocki 14y ago
      The oldest Gilt appears to be ISIN GB0000436070, issued in 1853: ISS'D 1853. CALLABLE FROM 1/5/1905 @ PAR W/30 DAYS NOTICE. £8,093,266 CONVERTED INTO 4½% WAR LOANS. DAYCOUNT CHG TO ACT/ACT EFF 11/1/98. The South Sea Bubble crisis happened in 1720, but it appears the company continued to manage the national debt until the 1850s, which corresponds nicely with this bond.
  - uvdiv 14y ago
    Some companies are still issuing those today: Rethinking the 'Long' Bond: Bankers Pitch 100-Year Debt, but Given the Risks, Would Investors Bite? http://online.wsj.com/article/SB20001424052748704488404575442021845873594.html http://online.wsj.com/article/SB2000142405274870448840457544...
  - SilasX 14y ago
    I wasn't criticizing bonds; I was criticizing bearer bonds -- i.e. bonds whose physical possession is the primary or only means of validating ownership.[1] It is no excuse that the bond was issued with 150 years maturity. In most developed countries, bearer bonds were phased out, so this guy you refer to certainly had the option during that time to convert it into a safer, informational form. If he simply likes clipping coupons so much that's he's willing to risk the loss (or at least hassle of proof of ownership) in the event that the physical bond is destroyed or lost, you're right -- it's his call to make, if that's indeed what he really wants, and it's really not enough to simply do the coupon clipping ceremonially (i.e. in a way that doesn't affect payment). I seriously doubt anyone has that exact preference though. I don't know how you read my criticism as being about the "bond" part rather than the "bearer" part. [1] Cash -- paper/coin notes of the central bank -- is a bearer instrument, and a bearer bond for some definitions of "bond", and it's for this reason that people are advised not to hold a lot of money in the form of cash at any one point in time.
    - Spooky23 14y ago
      People who want to avoid taxation love coupons.

After reading this article, I'm almost in tears when I realize what the mitigation step would have been for protecting those bearer bonds from moisture: Tupperware containers.

unabridged 14y ago

Yeah you would think these things would be in plastic folders like something used for a $20 baseball card. But there can't be that many left to cash, all of them have to be over 30 years old now which is one of the longest coupon lengths.

Maxious 14y ago

Self sealing comic book bags. $127.50 per 1000.

SilasX 14y ago

Or, you know, not storing large amounts of money in a long-obsolete financial instrument that you can't back up.

Spooky23 14y ago
Bonds are never obsolete. My dad knew a guy whose family owned some sort of bond with a 150 year maturity. It was used to build a long-defunct racetrack in the Bronx, and is now a NYC obligation. Is cutting out coupons a little silly? Sure. But the money is quite real!
- patio11 14y ago
  If you think 150 years is a while, wait to you hear about perpetual bonds. The United Kingdom still pays out interest, four times annually, on bonds which predate the existence of the United States of America. (They could theoretically call most of them, but owing to unilateral changes in the terms over the years, the coupon is so low as to make calling them a losing proposition as opposed to paying down more conventional debts of the nation.)
  - ghshephard 14y ago
    Citation: http://en.wikipedia.org/wiki/Consols http://en.wikipedia.org/wiki/Consols (to save others the search) First issued in 1751. "Consols still exist today: in their current form as 2½% Consolidated Stock (1923 or after), they remain a small part of the UK Government’s debt portfolio. As the bond has a low coupon, there is little incentive for the government to redeem it. Unlike most gilts, which pay coupons semi-annually, Consols pay coupons four times a year because of their age. As a result of their uncertain redemption dates, they are typically treated as a perpetual bond. ... Given their long history, references to Consols can be found in many places, including literature such as Pride and Prejudice by Jane Austen, David Copperfield by Charles Dickens, Howards End by E. M. Forster, Vanity Fair by William Makepeace Thackeray, Of Human Bondage by William Somerset Maugham and The Forsyte Saga by John Galsworthy and in economics."
  - apaprocki 14y ago
    The oldest Gilt appears to be ISIN GB0000436070, issued in 1853: ISS'D 1853. CALLABLE FROM 1/5/1905 @ PAR W/30 DAYS NOTICE. £8,093,266 CONVERTED INTO 4½% WAR LOANS. DAYCOUNT CHG TO ACT/ACT EFF 11/1/98. The South Sea Bubble crisis happened in 1720, but it appears the company continued to manage the national debt until the 1850s, which corresponds nicely with this bond.
- uvdiv 14y ago
  Some companies are still issuing those today: Rethinking the 'Long' Bond: Bankers Pitch 100-Year Debt, but Given the Risks, Would Investors Bite? http://online.wsj.com/article/SB20001424052748704488404575442021845873594.html http://online.wsj.com/article/SB2000142405274870448840457544...
- SilasX 14y ago
  I wasn't criticizing bonds; I was criticizing bearer bonds -- i.e. bonds whose physical possession is the primary or only means of validating ownership.[1] It is no excuse that the bond was issued with 150 years maturity. In most developed countries, bearer bonds were phased out, so this guy you refer to certainly had the option during that time to convert it into a safer, informational form. If he simply likes clipping coupons so much that's he's willing to risk the loss (or at least hassle of proof of ownership) in the event that the physical bond is destroyed or lost, you're right -- it's his call to make, if that's indeed what he really wants, and it's really not enough to simply do the coupon clipping ceremonially (i.e. in a way that doesn't affect payment). I seriously doubt anyone has that exact preference though. I don't know how you read my criticism as being about the "bond" part rather than the "bearer" part. [1] Cash -- paper/coin notes of the central bank -- is a bearer instrument, and a bearer bond for some definitions of "bond", and it's for this reason that people are advised not to hold a lot of money in the form of cash at any one point in time.
  - Spooky23 14y ago
    People who want to avoid taxation love coupons.