WHEN the Wardley Bond Index was launched on December 1 last year, Hong Kong was intoxicated by the heady fumes of a bond bull market. The buzz ended pretty quickly on February 4 when the Federal Reserve Board raised United States interbank rates. In the initial days after the first rise it was not clear how badly things had been derailed for some investors, but gradually the full story began to emerge, especially as the Fed continued to tighten and bond yields continued to rise. Various bond funds were suspended and rumours circulated of monumental losses by leading hedge fund operators who had leveraged themselves up to the hilt. Since the first stories came out, there seems to have been a never-ending stream of bond disaster stories, most of which have centred around the concept of leverage, where investors borrowed at one part of the yield curve to lend at the other and were thereby investing far more than their own stake. A bit like margin forex trading, really, except the salesmen have nicer ties and sweeter smiles. It would be interesting to know about the other side of these sob-stories. Given that these tales of Nightmare on Derivative Street all happen in the global market, there must have been winners as well as losers. The winners sought less publicity than some of the losers - the people who were content to take profit after profit last year, but cried foul this year when their bets fell apart. The winners did not boast for the simple reason that they were often the principals. A play on interest rates was a bet, just like any other.