Hooray!
For a brief time today, the yield on the Greek 10-year bond dipped below 2.0%.
US Bond Yields vs Europe
- US: 2.05%
- Greece: 2.01%
- Italy: 1.50%
- UK: 0.68%
- Portugal: 0.43%
- Spain: 0.36%
- France: -0.11%
- Germany: -0.37%
- Switzerland: -0.67%
Figures from Trading Economics.
Humorous Comparison
Dysfunctional Europe
Negative Yields Coming?
Cutting Time?
Let’s Bet on It!
Shock and Awe?
Global Currency Wars On
In case you missed the general idea, global currency wars (not so cleverly disguised as interest rate policy) are hugely underway.
And please note that the ECB is following Japan’s model and it did not do Japan any good.
Is the US Supposed to Follow?
For discussion of the resultant bubbles, please see Fed’s Asymmetric Bubble-Blowing Policy in Pictures.
Also note Shock and Awe Needed to Un-Invert the Yield Curve: Half-Point Cut Not Enough.
Mike “Mish” Shedlock
virtually bankrupt souvereigns borrowing at practically 0% : this must be a text book example of unsustainable insanity ….. Well, maybe I am crazy myself ….or damn right !
There is really no other choice because of the debt that has been incurred. We are going to 0.
Taking the ez way out never works (ever),Central Banks printed themselves into a corner (literally)where money printing is the only option to keep the scam goin and buy a few more years,know they’re printing just to buy a few more months,next year they’ll be printing to buy a few more days (hours),next exit ……….collapse!
I meant David Stockman. The edit function ignored me…twice.
“I meant David Stockman. The edit function ignored me…twice.”
Abend please explain. What happened?
Hi Mish,
I posted the comment, then noticed I’d typed Steadman instead of Stockman. When I clicked on the three dots and edit, and corrected Steadman to Stockman and clicked post, the edit didn’t take. I did it twice.
After the edit – did you click post?
Hi Mish,
Yes, both times. The entire sequence was:
1.Oops, I typed Steadman instead of Stockman; I’ll just edit it.
2.Click 3 dots, click edit, change to Stockman, click POST
Steadman remained so I repeated #2 sequence above, still to
no effect.
Then, I typed the comment describing my edit problem and it posted correctly. BUT THEN…I glanced at my earlier comment I’d tried to edit and Stockman was now staring back at me, the correction had belatedly worked. So, naturally, I now deleted my comment griping about the edit failures. BUT THEN…I glanced at my edited comment once again, just to be sure, and Steadman was back. I tried twice more to edit it to Stockman, to no effect. We’re now at four edit failures and one temporary success…
I then re-entered my original edit gripe comment.
My guess would be that somebody has some ‘splainin to do on how they’re handling write lock.
I can confirm, the edit function is broken.
“global currency wars (not so cleverly disguised as interest rate policy) are hugely underway.”
BINGO!!!
This is precisely what is happening. And, as David Steadman might observe, we’re witnessing widows and orphans cliff-diving for yield into 10 year Greek bonds…
Cue Paul Krugman sagely cautioning against any longing for the gold standard as, “unworkable” in a modern economy. It is indeed unworkable if you’re a politician peddling a free lunch lie.
Worthless currencies/bonds do not pay “interest”. That is the lesson here that many yet need to learn. And they will, in time – the hard way.
US Recession Indicator: Google Trends
By DataTrek Research
https://datatrekresearch.com/us-recession-indicator-google-trends/
Safes became popular in Japan. When does the popularity catch on?
“Is the US Supposed to Follow?”
…
Monkey see, monkey do
There’s another way to view negative interest rates — the entire credit balloon is slowly deflating. Slowly instead of selectively, because they are still injecting cash, preventing a repricing of credit and seeing assets move from weak hands to strong. Slowly because they are terrified where a more “natural” resolution of the rehypothecation recursive hall of mirrors would actually stop at. Slowly because we are buying time at the cost of ???
“Slowly because we are buying time at the cost of ???”
…
More pain. Strong believer in reversion to mean. Deferring the inevitable outcome only makes the splash bigger. Folks in forestry well know the benefit of controlled burns.
Some people got things very very wrong 7 years ago.