No one has paid as heavy a price as the generation that came of age just before and after the collapse of the housing bubble and ensuing banking crisis.
Today’s rate hike by the central bank of Sweden ends an absurdity. ECB and other central banks with negative rates are getting ready to follow.
“Many families, scratching a living on badly-paid zero-security jobs, just cannot pay the sort of rents many landlords, especially the big funds, have been asking for.”
What does it mean when the Fed and other central banks jointly bemoan the effects of their own policies? Worried about not being able to keep all the plates spinning?
Another “run on the fund.” More investors can’t get their money out but contemplate big losses.
Instead of warning about the effects of this absurdity, they could just raise rates and quit buying bonds.
Telefonica, with operations in Venezuela, Argentina, Chile, Peru, Ecuador, Colombia, and Mexico, is on the verge of “junk,” and the ECB holds some of its debt.
Yield-starved banks expanded lending to “relatively high-risk businesses” and to the property sector, as the Bundesbank considers house prices in many cities overvalued by 15% to 30%.
The fear that today’s negative or low interest rates render central banks helpless in face of the next economic crisis.
After a “run on the fund,” triggered when people figured out it was loaded up with crappy illiquid assets.