The man who looked into the ‘actual beating heart’ of the financial system—and saw something ‘profoundly dangerous’
· Fortune
In October 2021, Robin Wigglesworth was several years into his stint as the Financial Times‘ global finance correspondent, based out of his native Norway, when he released Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever. At the time, the Wall Street Journal called it a “magisterial, delightfully written history” and I relished it as a deep dive into a subject that Bloomberg’s Matt Levine often writes about, tongue in cheek, with blog posts like “maybe index funds will destroy capitalism” or “are index funds Marxist?“
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The idea, with so many trillions collectively invested to the point that they own 20% of publicly traded companies, is that they aren’t very capitalist at all, Levine noted in a more recent post titled “Index Funds Are a Bit More Illegal.” To get the full story, dating back to 19th century French mathematician Louis Bachelier, you need Wigglesworth’s epic, which skates along to the “bullheaded” John McQuown of Wells Fargo in the early 1970s, inventor of the index fund, and Vanguard founder John Bogle several years later, making that fund available to individual investors.
Who better, then, to tackle the equally epic story of the bond market and America’s $40 trillion—and swelling—national debt? “This stuff is important,” Wigglesworth told me in a recent interview from his home office, “but it’s also interesting and fun.” Where Trillions was 100 years of history, he added, A Fabulous Debt covers a full thousand, dating back to medieval Venice. “The index fund is like the humble hero,” Wigglesworth said, “the glue that holds it together.” But the bond market is something altogether different.
It’s to the credit of Wigglesworth, now the editor of the venerable, voicey FT blog Alphaville, indirectly named after the new-wave science-fiction film by Jean-Luc Godard, that his new history reads less like a finance textbook than a slow-building thriller about a nervous system that nobody bothered to map until it started misfiring. Publishers Weekly called the book “a must-read for anyone interested in global finance,” praising Wigglesworth’s “Dickensian eye for memorable events and characters.”
Covering finance is so fun, Wigglesworth said, because it’s like “understanding the hidden wiring of the world,” with the acceptance that “once you understand money, you also understand you’ll never fully understand it, but at least the world makes a little bit more sense or seems less like nonsense.”
Finance can feel like a “secret language that you and other people can understand,” Wigglesworth said, nowhere more than bonds. “The first time I talked to people about the bond market and understood the bond market was like, how it must feel [to be] a surgeon looking at like an actual beating heart on the operating table.”
From Jenkins’ Ear to the Erie Canal
From medieval Venice, where bonds originated as a way to fund warfare for an encircled lagoon nation, Wigglesworth traces the history of bonds directly through military miscellany. The bond market was involved in a “stunning number of weird, obscure wars,” Wigglesworth cheerfully offered, such as the War of Jenkins’ Ear (not featured in the book, or even much of a focus), fought over rumors that the Spanish had cut off the ear of an English sea captain and financed through war bonds. Far more famous conflicts had a bond element, even a central one, Wigglesworth found.
Take Napoleon’s defeat. “It wasn’t Horatio Nelson or the Duke of Wellington,” Wigglesworth insisted. “The only reason England could fight for so long against a far larger enemy and subsidize all their allies in Portugal and Prussia and so on was because they could basically fund themselves to infinity and beyond with this massive consol market, whilst France couldn’t because they just weren’t creditworthy.”
Wigglesworth found a young Alexander Hamilton making almost the same diagnosis two centuries ago, in a letter unearthed via a mention in Ron Chernow’s biography. “He basically wrote a letter saying, basically, England’s great power is its consol market — credit is actually what makes Britain able to feed, clothe and dispatch thousands of soldiers around the world.” Wigglesworth smiled, “I thought it was quite cool,” he said, adding that Hamilton realized this a lot earlier than many people in Britain did. It’s the insight that not only became Hamlilton’s life work but also built the shape of the modern United States.
Wigglesworth lit up when I mentioned an old PBS documentary I’d been watching on New York state and the Erie Canal. Calling it the “genesis moment” for the municipal bonds market, Wigglesworth said this subject didn’t make the cutting room floor, “but it’s one of the great examples in human history that shows what you can achieve by, you know, borrowing money, investing it wisely in smart projects.” There’s a very strong case that New York City never takes on its metropolitan scope if that canal doesn’t connect to the Great Lakes and then down the Hudson, which Wigglesworth noted is the only gap in the Appalachian Trail that runs all the way up to Canada. “New York was obviously a financial center before that, but there was an argument to be made that Philadelphia was really the most likely financial hub.”
Wigglesworth mentioned the largely forgotten first financial crisis in American history — the “scriptomania” that Owen Lamont wrote about in these pages — and noted that Richard Sylla, “the granddaddy of American financial historians,” agrees with the thesis that the Erie Canal gave the northern American states their shape.
On a larger scope, he argued, bonds were “what united the United States,” both metaphorically, financially and politically. Once all the state debts from the Revolutionary War were assumed and made federal debt, then refinanced with the first Treasury bonds, that created an American community of “creditor citizens,” he said, noting that a similar process took place with some of the city-states in Italy and in the U.K. as well. “We kind of think of history sometimes is inevitable, like A equals B equals C. And that’s how we’ve studied it. But like, it could have gone in a very different way.”
Of course, bonds went far beyond canals for Americans into railroads, an infrastructure buildout that he convincingly compares to today’s data-center frenzy. “Nobody built more railways than the Americans,” he said. “That’s partially because it’s a big country. But also [it’s] because the Americans could.”
Modern ‘fragility’
By the time Wigglesworth’s book reached the present day, he said, the ending chose itself. He had originally considered closing on the admittedly wonky subject of bond ETFs — a natural sequel to Trillions — but he landed somewhere darker. A thousand years of bond history keeps pointing at the same unfinished question: whether the financial nervous system he discovered can survive contact with the modern financial system.
Everyone knows the number: $40 trillion, for America’s national debt, dominating campain ads and dinner-table arguments heading into the midterm elections. There are two aspects of this subject, Wigglesworth claimed: one that he’s “profoundly relaxed” about and the other, which makes him quite more alarmed. No, America won’t go bankrupt, he said. “I’m not saying it’s a 0% chance … but it’s a 0.01% chance, and it’s high now and it will probably keep going higher.”
“My biggest worry,” Wigglesworth said, “is some of the fragility around the changing players, like who’s active in Treasuries and how it’s financed.” For most of the postwar era, he added, the Treasury market’s steadiest customers were foreign central banks, but these have “tiptoed” out for a couple decades now, replaced by hedge funds running leveraged trades. “I worry that the growing heft of far more price-sensitive and extremely leveraged players in the Treasury market makes that market more volatile, more prone to sudden hissy fits,” Wigglesworth said, describing something akin to high blood pressure in an aging patient.
“In practice we’re all competing with the U.S. government for money,” he said, explaining that spikes in Treasury yields ripple all the way across the global economy, even felt in Norway, and its increasing brittleness is “profoundly dangerous,” he said. He explained that borrowed money now comes from the so-called “repo” market, the short-term, overnight lending market that most people haven’t heard of, to their detriment. People forget about the causes of the Great Recession, he argued. “What killed Bear Stearns, what killed Lehman, wasn’t necessarily just toxic assets and all that jazz,” he said. “It was a repo run.” And a market that size, built on the same overnight logic, is now sitting directly under America’s $40 trillion national debt — and they’re both growing.
“The entire global financial system rests on Treasuries because it is the most liquid, the most dependable, the most solid,” Wigglesworth said. “And that’s kind of how we’ve ordered the global economy, by accident almost. But that bedrock, I fret, is a little bit more brittle than commonly appreciated.”
Just a few trillion dollars in 2008, the repo market has since ballooned past $12 trillion — sloshing around overnight, unsecured by anything but collateral and confidence. The specific trade Wigglesworth is describing, known as the Treasury cash-futures basis trade, has grown to roughly $830 billion as of last September, according to a June 2026 Federal Reserve research note — about double its pre-pandemic peak in early 2020, and now representing more than a third of hedge funds’ total long Treasury exposure. A separate paper presented at a Brookings conference goes even further, concluding that the basis trade is “inherently fragile” by construction.
He reached for a Warren Buffett anecdote, recalling that at Berkshire Hathaway’s virtual annual meeting in April 2020, Buffett recalled that CEOs were truly shaken by tremors in Treasuries. “We got to the point where the U.S. treasury market, the deepest of all markets, got somewhat disorganized,” Buffett said. “And when that happens, believe me, every bank and CFO in the country knows it. And they react with fear, and fear is the most contagious disease you can imagine. It makes the virus look like a piker.”
“You want your bomb shelter, the Treasury market, you want that to be safe as hell,” Wigglesworth said. “And when your bomb shelter starts like making weird noises, it freaks people out that much more.”
This story was originally featured on Fortune.com