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5 comments about How the Bond Market Works.

1. I found the book disappointing and I question its reliability.

   The following quote is taken directly from page 58 of "How the Bond Market Works", by Robert Zipf:

   "However, the Tennessee Valley Authority frequently borrows money from the public. Its securities are not guaranteed by the United States Government, and are not generally exempt from state income taxes.

   The following quote is taken directly from the "Tax Matters" section of bond offering circulars issued by the Tennessee Valley Authority.

   "A U.S. beneficial owner is subject to federal income taxation on income on a Bond. The Act, however, provides that bonds issued by TVA are exempt both as to principal and interest from all taxation now or hereafter imposed by any state or local taxing authority except estate, inheritance and gift taxes."

   (If you care to check it out for yourself, Tennessee Valley Authority offering circulars dating back to 1989 are available online, in PDF format, at the TVA web site.)




2. I found this book to be very helpful in understaning this topic. I would recommend it to people new to the industry as a good starting point to learn about the bond market.



3. As a person studying for the Series 7 examination, this document was extremely helpful in understanding the test preparation material. Other people may say there are errors in the document, well, if that is true, then the test-prep books, and the test itself is wrong.

   This is a good book people. It can tell you lots of things. Its only downside is that it needs more numerical examples and more mathematical examples to show the concepts behind yield to mature data.




4. If you've read any number of books on investing, you know they can be tedious. But this book is relatively crisp and to the point. When the details of a subject are beyond the scope of a 200 page read, the book says so. If you are doing anything related to bond investing (even programming!) you should get started with this book.



5. I found this to be a very good starting point for researching different types of bonds. It does cover in good detail about how the Bonds are brought to the market, the commission structure involved, also touches upon the documentation standard followed for indentures and bond insurances.
   
   I found the coverage of Mortgage backed securities pretty good! Found interesting coverage on how to structure CMOs, how different tranches and different types of bonds (e.g. non-sticky Jump Z Bonds) could be created based on the payments received on the mortgage pools.
   
   All in all I found this book pretty good, definitely worth the money (especially when borrowed from the library) and time. I would not treat it as a reference for taxation information, also while on the topic of taxation, the Munis deserved a more extensive coverage.