The chart is courtesy of Chris Puplava at Financial Sense following an request by me. The data is from Bloomberg.

10-Year Yield Comparison

  1. US: 2.05%
  2. Canada: 1.50%
  3. UK: 0.83%
  4. France: 0.02%
  5. Japan: -0.14%
  6. Germany: -0.30%
  7. Switzerland: -0.53%

100-Year Bond Yield Madness

I failed to ask about Austria.

Please note a 100-Year Austrian Bond Yields 1.2%.

If you needed any more proof that the world of fixed income has gone mad in the rabid hunt for yield, look no further than the Republic of Austria. If you liked its 100-year debt issued two years ago with a 2.1% return, how about settling for the same maturity for 1.2% now? Yes, you read that right: A 100-year bond yielding about 1.2%.

If you wanted to buy any of those 2.1% 2117 Austria bonds right now, you’d have to pay 60% more than their issue price; they’ve been a great success.

Got that? If you bought 2117 bonds two years ago yielding 2.1%, you are now sitting on a 60% gain.

Flattest Curve in World History?

A quick check shows that Austria's 10-year bond yields -0.02%

Investors get just over 1 basis point per year over the course of 100% years.

Good Reasons?!

Axios attempts to rationalize negative-yield bonds in the Resurgence of Negative-Yielding Debt.

The big picture: The benchmark 10-year bond yield is negative in Germany, the Netherlands, Switzerland and Japan; it's also this close to going negative in France. Even Greece has seen its 10-year bond yield fall to just 2.4%, an all-time low.

Be smart: You'll see a lot of chatter about how the investors in these bonds would get a better return were they to just stash cash under a mattress. Ignore that chatter. If you're an institutional investor managing trillions of dollars in assets, you can't convert that money into cash, and while a bank will probably pay you 0% for that money, you still end up taking significant counterparty risk. Bonds have negative yields for good reason.

Negative Yields Logically Impossible

In the real world negative-yield bonds are impossible. No one would prefer a dollar ten year from now to a dollar today.

Bond yields are negative only via direct, constant manipulation by central banks for no good reason at all.

In fact, negative yields hurt bank profits and savers as well.

I suspect but cannot prove, a negative yield derivatives mess is partially responsible for the collapse of Deutsche Bank.

Regardless, whereas the Fed bailed out US banks by paying interest on excess reserves, the ECB charged banks interest on excess reserves (hoping to spur lending) but it didn't, and won't.

I do not agree with Fed-sponsored bank bailouts, but the ECB policy is pure madness.

Mike "Mish" Shedlock

Making Sense of 100-Yr Bonds yielding 0% and 30-Yr Bonds With Negative Yield

Over 50% of European gov't bonds have a negative yield. Globally there's $15 trillion in negative-yield debt.

Currency Wars: Greek 10-Year Bond Yield Dips Below 2% as Bets on Rate Cuts Rise

For the first time ever, Greek 10-year bond yields dipped below 2%.

European Peripheral Debt Again in Question: Portuguese 10-Year Bond Yield Spikes to 4.4% from 2.65%

European peripheral debt is under attack. Yield on the Portuguese 10-year bond yield spiked as high as 4.425% from a low of 3.532% earlier today. Yield is up from 2.654% in January. Portugal 10-Year Government Bond

Central Bank Sponsored Madness: Inversions on Negative-Yield Bonds

German bonds are inverted in 19 places despite the fact that the German bonds have a negative yield for 13 years.

Japan’s Negative-Yield, Inverted Bond Market Close to Breaking Point

Japan’s dysfunctional bond market is not only inverted between three month and eight years, it also sports negative yields out to 10 years.

Hello Treasury Bears: 10-Year Bond Yield Approaching Record Low Yield

Treasury yields are down again today, the 6th straight day of strengthening inversions. 30-year to FF inversion on deck.

New Record Low Yields on 10- and 30-Year Bonds: Double Cut?

Treasury yields continued a massive plunge today with new record lows. I sense a double rate cut by the Fed on March 18.

30-Year Bond Yield Just a Hair from Record Low, 2-10 Yield Spread Near Inversion

Bond yields resumed their post-FOMC crash today after a weak two-day respite. Inversions strengthened across the board.

Germany Joins Japan, Switzerland in Negative 10-Year Yield Club

For the first time ever, German 10-year sovereign bonds dipped below zero. With that event, Germany joined Japan and Switzerland in the negative 10 club.