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.
We’ll also look at its garbage pile at the bottom. These folks don’t even pretend to be stock pickers. They buy and let it stick till it falls off on its own.
After peak negative-yield-absurdity in August, bond prices fell – the “bond bloodbath” – and the mountain of bonds with negative yields has plunged by $5 Trillion, or by 30%, despite rate cuts.
Russian billionaire rues the day he bought it. “We should have been more cautious and done our due diligence better.”
US barely Cleanest Dirty Shirt among the manufacturing giants.
In funds with a liquidity mismatch, the First-Mover Advantage is huge, as Woodford’s investors found out.