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Thread: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

  1. #21
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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by iguanaman View Post
    All is not well in Europe. Their economies are suffering from the bank installed austerity and the continued absence of the "Confidence Fairy" that was to be their savior. They are only now getting around to QE when their economies are dangerously close to deflation from previous tight money policies. Thankfully we did not fall into that trap here. Thank you Obama.

    Nonsense.

    Their economies are suffering from the consequences of leftist corruption and policies that allowed them to spend beyond their means for years.

    " Austerity "....Lol ! Gotta love the brain dead liberal platitudes.

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by justabubba View Post
    Okay. That was about as i thought.

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by joG View Post
    Thank Hank Paulson for that. After all, credit should be given thise to whom it is due.

    No you can thank Progressive policies that date back to the early 90s and two EXTREMELY corrupt and Democrat run and protected GSEs for that.

    Give credit where credit is due.

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by Fenton View Post
    Nonsense.
    Their economies are suffering from the consequences of leftist corruption and policies that allowed them to spend beyond their means for years.

    " Austerity "....Lol ! Gotta love the brain dead liberal platitudes.
    Basically true.
    You have a Vast Social support Network In Europe, incl Healthcare of course.

    But all these economies depend on Growth to Fund these aging Euro-boomers.
    But Europe's [NATIVE] Fertility rate is WAY below replacement.
    Immigrants have been let in as the new workers, but Instead they end up being a big drag on those Social funds. (!)

    Frankly, I think all but Germany and few other Northern EU states are Screwed. (incl France)
    Japan, with no immigrants, has a population shrinking into Oblivion and printing Yen to pay for same Busted system. (selling more senior diapers than baby diapers)
    USA is considerably better demographically.

    :Correction on my Math above:
    Buyers of the German bonds above would lose $8 per $1000 per Year. IOW Lose $40 over the 5 years..
    Have $960 per $1000 'invested' in 2020.
    I'm personally sick of not being able to dunk a basketball because of racism.
    anon

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by Fenton View Post
    Nonsense.

    Their economies are suffering from the consequences of leftist corruption and policies that allowed them to spend beyond their means for years.

    " Austerity "....Lol ! Gotta love the brain dead liberal platitudes.
    LOL Like Europe was not doing well before the financial meltdown? Gotta love the flight from reality and historic denial-ism from the radical right. The reality is that Europe cut spending and their banks kept interest rates artificially high for too long and they are paying the price with a double dip. Your just jealous because you and the GOP wanted the same thing for the US and failed. Instead we got the fastest growing economy in the free world and you are livid.
    Last edited by iguanaman; 02-26-15 at 02:48 PM.

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Bill Greiner
    Forbes - 3/12/2015
    "Nega-Coups" And The Implications Of Negative Interest Rates On The Global Economy - Forbes

    What do you call a bond which carries a negative interest rate? It’s called a “nega-coup,” short for negative coupon. Negative coupons, or interest rates on bonds, is a rather novel reality in today’s sovereign debt (government backed) market. These are government bonds (mostly issued in Europe and Japan) where the investor is guaranteed to lose money if the bond is held to maturity.
    Let me give an example.
    Currently, German two-year government bonds are yielding -0.21%. If an investor purchased $10,000 of these bonds, they would receive $9,958 back in two years. That return is guaranteed by the German government. Recently, interest rates out to nine years were negative in Switzerland. Germany’s rates were negative out to six years, Denmark out to five years, and Sweden out four years.
    [.......]
    Nega-coups are not new. Certain interest rates in Sweden were negative from 2009 – 2010. The same was true in Denmark from 2012 – 2014, and now Germany, Finland and Switzerland all are issuing bonds with negative attached interest rates. According to the Wall Street Journal, 16% of all outstanding government bonds (on a global level) currently carry negative yields.

    The nega-coup concept violates a long-held economic presumption that interest rates cannot go below 0%. Why? In theory, if an investor has to pay someone to simply “hold” their money, the investor will forgo savings and increase consumption as their wealth is bound to decline in the future. That is the theory…which has now gone out the window.

    Why Negative Interest Rates Are Happening
    [........]
    Last edited by mbig; 03-14-15 at 10:07 PM.
    I'm personally sick of not being able to dunk a basketball because of racism.
    anon

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by joG View Post
    Thank Hank Paulson for that. After all, credit should be given thise to whom it is due.
    Anything that is good = Obama is responsible and did it personally.
    Anything that is bad = Bush/Republicans did it.

    Wise up man!!!!!
    The Gruber-crat is strong in this one!

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by mbig View Post
    Yes.
    So if you buy $1,000,000 worth of Bonds, you have to GIVE them an additional $1600 a year for 5 years, and in 2020, you will be guaranteed to have $992,000.

    Not most people's idea of 'investment', tho short term rates have been virtually zero in many countries for quite a while.
    And what money manager is making that 'investment?' I suspect that there are none. The only ones that would buy this junk are other central banks.

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by Fletch View Post
    And what money manager is making that 'investment?' I suspect that there are none. The only ones that would buy this junk are other central banks.
    If you are Rich and Live in, ie, Brazil etc, and your currency is devaluing 10% a year (faster than its growing), buying German bonds a relatively good buy. You're buying the currency/safety.

    Another: Many German citizens, like Japanese and others, like to buy only their own countries sovereign debt.

    Another: Short term US Rates went negative during the recession, and Some Banks Charged large depositors to hold their money.. for Safety sake.

    Another: Should, ie, the EU break up and you have German bonds, you'll get German Marks that are worth having, more than Greek Drachma or Italian Lira.

    For just a few examples.
    Me, I'd never do it.
    One reason Blue Chip Commercial Real Estate is so high, is that the interest rates are so low.
    I'm personally sick of not being able to dunk a basketball because of racism.
    anon

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    Re: Germany Sells Five-Year Debt at Negative Yield for First Time on Record

    Quote Originally Posted by Chainsaw View Post
    Anything that is good = Obama is responsible and did it personally.
    Anything that is bad = Bush/Republicans did it.

    Wise up man!!!!!
    The irony is if we are talking about the economy what you said is very true. 60 months of job growth is unprecedented. History shows we almost certainly would be in another downturn had a Republican been elected. It is not a coincidence either.

    As it happens, they are--the recession began on President George W. Bush's watch, and it was a consequence of the sort of lax financial regulation that Republicans (including the Reagan-appointed Fed chief, Alan Greenspan) promoted for years and, amazingly, still promoted. Some Democrats deserve blame, too--notably the Clinton-era treasury secretaries Larry Summers and Robert Rubin. But it was Republicans who pushed deregulation hardest, and who most fervently resisted extending regulatory governance to newly-evolving corners of finance. (This latter strategy, which the political scientists Jacob Hacker and Paul Pierson call "drift," has been crucial in reducing regulation generally, because in Washington it is always easier to prevent something from happening than it is to create new policy.)
    The Republican Recession | The New Republic

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