Forget the current political madness - yesterday saw a number of key moments for bond markets: UK Chancellor Sajid Javid hitting the spend button in the UK, another $30 bln new issuance day in the US, BAWAG launching a 10-year negative yield Covered Bond, Spain about to launch a 50 year issue at a smidge over nothing, and Christine Lagarde lecturing the European Parliament about the need for Fiscal Policy initiatives.
Worry less about how index funds, or ETFs will trigger the next crisis, but what happens when bond markets collapse on a few points of interest rate rises, triggering massive defaults, while chronic illiquidity creates the biggest value trap of all time.
Now its about to launch a half-century bond! In a currency it has absolutely no real control over!
I will go as far as to opine Central Banks are no longer a solution - they have become the Risk.
There is nothing healthy about the current mutual dependency between Central Banks and Markets.
When even the CEO of Deutsche Bank is warning about the dangers of negative rates then is must be obvious to the ECB: "Few economists believe cheaper money on this level will do anything." He went on to say central banks have few options to deal with a real crisis.
What else can central banks do? Their cupboards are bare.
https://www.zerohedge.com/news/2019-09-05/blain-central-banks-are-no-longer-solution-they-have-become-risk
Worry less about how index funds, or ETFs will trigger the next crisis, but what happens when bond markets collapse on a few points of interest rate rises, triggering massive defaults, while chronic illiquidity creates the biggest value trap of all time.
Now its about to launch a half-century bond! In a currency it has absolutely no real control over!
I will go as far as to opine Central Banks are no longer a solution - they have become the Risk.
There is nothing healthy about the current mutual dependency between Central Banks and Markets.
When even the CEO of Deutsche Bank is warning about the dangers of negative rates then is must be obvious to the ECB: "Few economists believe cheaper money on this level will do anything." He went on to say central banks have few options to deal with a real crisis.
What else can central banks do? Their cupboards are bare.
https://www.zerohedge.com/news/2019-09-05/blain-central-banks-are-no-longer-solution-they-have-become-risk
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