Here is how I began the Preface to the Third Edition of this book:
One hopes that my writing has progressed since the first edition of this book was published in 1999. Certainly the markets themselves have moved on, as the constant dynamic that is the world’s fixed income markets results in new products and processes on an almost daily basis. It is a task in itself merely to keep up with new developments in bonds and financial engineering, let alone to write about them in a way that is of value to market practitioners. Still, as the character played by Kiefer Sutherland in the 1988 movie Young Guns said, ‘Let’s finish out the game!’ We began the journey with the first edition, so let us continue it now with this much revised and (we hope!) improved third edition.
Ignoring the quote from the movie, the above remains unchanged. In the four years since the third edition was published, we’ve gone from a bull market and seemingly unrestrained optimism, with the markets embracing structured finance securities and credit derivatives as their new best friend, to a major banking crisis and global recession. And the best friend is now, for some, the worst enemy. Thankfully this is a textbook on the bond markets, not a journalistic treatise on how good or bad they are. Of course, there is no argument, the debt capital markets and the banks are indispensable to worldwide economic and social development. But this book is not the place to debate this either way.
The fourth edition ...