Posted on 08/21/2019 7:05:04 AM PDT by Leaning Right
LONDON/BERLIN Aug 21 (Reuters) - Germany sold 30-year bonds with a negative yield for the first time at an auction on Wednesday, a milestone for a fixed-income market where the entire curve now yields less than zero.
The euro zone’s benchmark bond issuer sold 824 million euros of the new long-dated bonds against a target of 2 billion euros, with an average yield of -0.11%. The coupon on the bond was set at 0% earlier this week.
(Excerpt) Read more at reuters.com ...
i believe the purchaser can right off the fees to the general public by taking a tax deduction...
oops write.
left brain- left brain.
But then again, I don’t have a PhD in Economics.
...
That’s because you have common sense instead.
The argument is that holders will make money by selling the bond if interest rates go up.
I read another story that this auction went poorly.
I’m thinking that you should go get it back.
If the corrupt German politicians cut taxes and regulations they wouldn’t have to resort to negative yields.
The argument is that holders will make money by selling the bond if interest rates go up.
...
Ooops. I believe they make money if interest rates go down further into negative territory..
“Shut up and take my money “.
Literally.
Yes, prices are inversely related to yields
This is why we’re getting yield inversion this side of the pond. Investors are buying Treasuries to get the 2% yield.
Seems like the only ones who could profit would be "insiders"- who would sell knowing that there was a plan to drop the rate further.
I think the average man on the street would think it draft to purchase a bind, and then pay to hold it.
If cronyism is part of these transactions, then purchasers realize benefits in other nefarious ways not open to public scrutiny or participation.
Globalist propping up their house of cards.
Whatever the Krauts are demanding to take their money, I’ll be happy to hold their money for half as much.
> I believe they make money if interest rates go down further into negative territory. <
I guess that’s true. A -0.11% bond would be worth more than a -1% bond. But who the heck would buy either bond, especially since these are 30 year bonds? Do investors really believe Germany will someday be issuing -1% bonds? I guess they do.
This world is getting just too crazy. I think I’ll ignore it and go back to watching “Leave It To Beaver”. I wonder what that scamp Eddie Haskell is up to. He’s probably trying to sell the Beav negative interest CDs from the Bank of Haskell.
The article DIDN’T explain though that over half the issue was bought by the German Bundesbank ie) their nominal central bank, under the European Central Bank. There weren’t enough buyers interested in a super long-dated negative yielding bond. Surprise, surprise.
Ie) the Bundesbank just created money from nothing, transferred it to the German Government, in exchange for these bonds.
Central Banks combined with fiat currencies are EVIL.
First time in my life have seen a 30 year bond having negative interest rates.
There’s over $15 trillion in negative yielding debt so there’s plenty of buyers.
The yield curve is inverted because the Fed is manipulating short term rates too high.
***
Click the animate button to see how the significant movement is to the left of the curve as the Fed manipulates rates.
https://stockcharts.com/freecharts/yieldcurve.php
“I read another story that this auction went poorly.”
If the subscription rate wasn’t 3-5 to one, iow if demand was not high and these bonds were not over subscribed that would indicate a poor response.
I wouldn’t be surprised if the German Government didn’t buy at least a part of this offering.
Is this a superior investment when compared to my Nigerian banking?
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