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pittmike
 Post subject: Negative Bonds
PostPosted: Wed Jun 15, 2016 8:19 am 
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Okay, I have to plead ignorance on this subject. I can't grasp why it happens so naturally I never looked into how it works. Why would a country's bond go to 0 or negative interest? Why would anyone or a entity invest money in a vehicle that takes some of your capital and gives you less back?

http://www.cnbc.com/2016/06/15/us-bond- ... egist.html

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SomeGuy
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 9:01 am 
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The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.
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pittmike
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 9:21 am 
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SomeGuy wrote:
The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.



But I read here the economy is good and unemployment is down.

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Chus
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 10:40 am 
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pittmike wrote:
SomeGuy wrote:
The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.



But I read here the economy is good and unemployment is down.


Believe whatever you want, but we are in better shape now, than when W left office.

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Hank Scorpio
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 10:47 am 
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Chus wrote:
pittmike wrote:
SomeGuy wrote:
The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.



But I read here the economy is good and unemployment is down.


Believe whatever you want, but we are in better shape now, than when W left office.


He left office right at the start of a terrible recession. Obama is set to leave office right at the beginning of what looks to be a another recession. Meet the new boss, same as the old boss.

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denisdman
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 10:56 am 
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Mike, negative bond yields are happening for several reasons. Globally, central banks are buying government bonds in an effort to lower interest rates and spur business investment. They are also targeting overnights rates in parts of Europe and Japan that are negative. Banks and insurance companies have to put excess cash somewhere, and government bonds are considered a safe and liquid form of investment. And lastly, risk based capital rules are such that high rated government bonds do not incur a capital charge. They are taken out of the denominator in the risk weighted asset calculation. Basel rules are forcing banks to hold more capital, so in effect, banks have to hold a certain amount of these bonds.

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City of Fools
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:02 am 
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Chus wrote:
pittmike wrote:
SomeGuy wrote:
The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.



But I read here the economy is good and unemployment is down.


Believe whatever you want, but we are in better shape now, than when W left office.

I'd love to see the metrics. W was an idiot but manufacturing wise the economy seems the same. Bad.

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Hank Scorpio
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:08 am 
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City of Fools wrote:
Chus wrote:
pittmike wrote:
SomeGuy wrote:
The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.



But I read here the economy is good and unemployment is down.


Believe whatever you want, but we are in better shape now, than when W left office.

I'd love to see the metrics. W was an idiot but manufacturing wise the economy seems the same. Bad.


The metrics will say whatever side you want. Turn on MSNBC and unemployment is low, turn on FOX and the number of active job seekers is the lowest since the late 70s. Nothing has changed. The march to oblivion continues unimpeded.

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GoldenJet
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:09 am 
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City of Fools
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:16 am 
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Hank Scorpio wrote:
City of Fools wrote:
Chus wrote:
pittmike wrote:
SomeGuy wrote:
The powers that be don't do things like this because "the economy" is doing well.

It means things are bad and the end of the road is in the horizon.



But I read here the economy is good and unemployment is down.


Believe whatever you want, but we are in better shape now, than when W left office.

I'd love to see the metrics. W was an idiot but manufacturing wise the economy seems the same. Bad.


The metrics will say whatever side you want. Turn on MSNBC and unemployment is low, turn on FOX and the number of active job seekers is the lowest since the late 70s. Nothing has changed. The march to oblivion continues unimpeded.

ding.

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Dr. Kenneth Noisewater
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:30 am 
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denisdman wrote:
Mike, negative bond yields are happening for several reasons. Globally, central banks are buying government bonds in an effort to lower interest rates and spur business investment. They are also targeting overnights rates in parts of Europe and Japan that are negative. Banks and insurance companies have to put excess cash somewhere, and government bonds are considered a safe and liquid form of investment. And lastly, risk based capital rules are such that high rated government bonds do not incur a capital charge. They are taken out of the denominator in the risk weighted asset calculation. Basel rules are forcing banks to hold more capital, so in effect, banks have to hold a certain amount of these bonds.


I don't think anybody wanted the real answer, denis.

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Nas
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:42 am 
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Dr. Kenneth Noisewater wrote:
denisdman wrote:
Mike, negative bond yields are happening for several reasons. Globally, central banks are buying government bonds in an effort to lower interest rates and spur business investment. They are also targeting overnights rates in parts of Europe and Japan that are negative. Banks and insurance companies have to put excess cash somewhere, and government bonds are considered a safe and liquid form of investment. And lastly, risk based capital rules are such that high rated government bonds do not incur a capital charge. They are taken out of the denominator in the risk weighted asset calculation. Basel rules are forcing banks to hold more capital, so in effect, banks have to hold a certain amount of these bonds.


I don't think anybody wanted the real answer, denis.


#ThanksObama

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Dr. Kenneth Noisewater
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:44 am 
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MAKE BONDS GREAT AGAIN!

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denisdman
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:45 am 
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Well technically they are Ken because low yields mean higher prices....

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Dr. Kenneth Noisewater
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 11:46 am 
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See. It only took me 3 minutes.

#Ken2016

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good dolphin
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 12:04 pm 
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Dr. Kenneth Noisewater wrote:
denisdman wrote:
Mike, negative bond yields are happening for several reasons. Globally, central banks are buying government bonds in an effort to lower interest rates and spur business investment. They are also targeting overnights rates in parts of Europe and Japan that are negative. Banks and insurance companies have to put excess cash somewhere, and government bonds are considered a safe and liquid form of investment. And lastly, risk based capital rules are such that high rated government bonds do not incur a capital charge. They are taken out of the denominator in the risk weighted asset calculation. Basel rules are forcing banks to hold more capital, so in effect, banks have to hold a certain amount of these bonds.


I don't think anybody wanted the real answer, denis.

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pittmike
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 1:00 pm 
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Dr. Kenneth Noisewater wrote:
denisdman wrote:
Mike, negative bond yields are happening for several reasons. Globally, central banks are buying government bonds in an effort to lower interest rates and spur business investment. They are also targeting overnights rates in parts of Europe and Japan that are negative. Banks and insurance companies have to put excess cash somewhere, and government bonds are considered a safe and liquid form of investment. And lastly, risk based capital rules are such that high rated government bonds do not incur a capital charge. They are taken out of the denominator in the risk weighted asset calculation. Basel rules are forcing banks to hold more capital, so in effect, banks have to hold a certain amount of these bonds.


I don't think anybody wanted the real answer, denis.



Yes I did and thanks Dennis.

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Hank Scorpio
 Post subject: Re: Negative Bonds
PostPosted: Wed Jun 15, 2016 2:41 pm 
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I love Dman but I didnt understand a word he said. I'm also poor and stupid so that could be the real reason.

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