Quote:
Originally Posted by Finner
From td economics:
It seems that every week that the European crisis goes on, a new record is broken. This week, government bond yields
in the United States and Germany broke through their previous historic lows to even more historic levels. In Germany, the 2-year government bond yield actually fell negative. In the U.S. the 10-year bond yield has breached the 1.5% mark, a level never seen in the 200 years that data has been recorded. Government bonds of safe-haven countries have turned into the equivalent of Brink’s trucks – investors are willing to pay a premium just to get their money back in a few years time. In Germany’s case, it’s “most,” not “all” of their money. We are truly in uncharted territory
Interesting times indeed. Everytime it seems to get better, it gets worse.
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If anyone wants to see what this means:
http://online.wsj.com/article/BT-CO-...23-715726.html
Das Germans be profiteering!!!
Edit: that's a subscription site. Annoying.
Another one:
http://247wallst.com/2012/06/01/germ...rcent-returns/
Anyways, when a bond goes negative like that, it means that investors are willing to take less than face value when the bond comes to maturity and they cash it. Germany is essentially receiving a pile of cash for the "priveledge" of holding what investors perceive as a safe harbour for their money. Safe investment countries are offering a really low ROR right now, essentially because they can (Canada is 1.5% IIRC).
Crazy.