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The Essays of Warren Buffet

Mindware

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A Look at the Stripping of Government Bonds

David Frum: Zero-oupon bonds offer one overwhelming advantage. It is impossible to default on a promise to pay nothing, he says. But lenders took a while to accept the new position in respect to principal payments, and debt became something to be refinanced rather than repaid,. He says Wall Street's ingenuity hits limits when it comes to making good deals look like bad ones.

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