Money: Sub zero: grappling with the topsy turvy world of negative yields - PressFrom - United Kingdom
  •   
  •   

MoneySub zero: grappling with the topsy turvy world of negative yields

16:10  13 august  2019
16:10  13 august  2019 Source:   msn.com

Yield Curves Invert in U.S., U.K. as `Doom and Gloom' Spreads

Yield Curves Invert in U.S., U.K. as `Doom and Gloom' Spreads The stream of investors seeking refuge in the safest parts of the market has triggered yet another recession warning, with yield curves inverting from the U.S. to the U.K. The gap between two- and 10-year yields dropped below zero on both sides of the Atlantic after a wave of soft economic data globally. Weaker-than-forecast Chinese retail sales and industrial output set the mood for the markets, with data later in the day showing Germany’s economy contracted, adding to the gloom. © Bloomberg U.S. and U.K.

The spread of negative - yielding debt has raised profound questions about the extraordinary lengths central banks have gone to in a bid to revive the Investors thirsty for yield have been forced to look elsewhere, ensuring the spread of sub - zero yields and dragging down borrowing costs everywhere.

Sub zero : grappling with the topsy turvy world of negative yieldshttps://on.ft.com/31DCcq3.

Sub zero: grappling with the topsy turvy world of negative yields © Getty

Making an investment that is guaranteed to lose money sounds like something that would cost you your job. But in bond markets, it has become a fact of life.

Bonds worth $15tn (£12.43tn) — roughly a quarter of the debt issued by governments and companies around the world — are currently trading with negative yields. That means prices are so high that investors are certain to get back less than they paid, via interest and principal, if they hold the bond to maturity. They are, in effect, paying someone to look after their money.

The spread of negative-yielding debt has raised profound questions about the extraordinary lengths central banks have gone to in a bid to revive the economy over the past decade. At the same time, bond markets’ journey through the looking glass has befuddled many investors.

NASA's sun-sailing mission is proving a surprising success: Quest to work out how the star works yields 50 percent more data than initially projected

NASA's sun-sailing mission is proving a surprising success: Quest to work out how the star works yields 50 percent more data than initially projected Extra data delivered by Parker will offer unprecedented insights into our sun, including info on particles, waves, and observations of the Sun's corona and the solar environment. The probe, about the size of a family compact car, has traveled closer to the sun than any other man-made object, enduring some of the most brutal conditions imaginable. Those include cosmic radiation 500 times more powerful than radiation on Earth and temperatures of 1,300°C (2,400°F).

Topsy Turvy World is a members only indoor play centre and party venue situated just behind Brent Cross shopping Centre for children under 12 years old with accompanying adults. We have separate baby & toddler and under 4 play areas. The main multi-tiered play frame is full of excitement and

x should equal two then zero and stop at one. These diverging equations are breaking me apart, my pieces are flying off and never returning. These iterations never tend towards convergence, if only there was a way to truly find out: the answer, the purpose.

“Free money — it’s sort of an insane concept,” said David Hoffman, a bond portfolio manager at Brandywine Global in Philadelphia. “Having grown up in a very different world it’s challenging to navigate this.”

Negative interest rates first appeared in Japanese money markets two decades ago. Since the financial crisis, they have engulfed government bond markets in Japan, Sweden, Switzerland, Denmark and the eurozone — all economies grappling with low inflation where the central bank has set interest  rates below zero. Investors thirsty for yield have been forced to look elsewhere, ensuring the spread of sub-zero yields and dragging down borrowing costs everywhere.

As a result, oddities now abound. Danish lender Jyske Bank last week issued a 10-year mortgage bond at an interest rate of minus 0.5 per cent, meaning homeowners are being paid to borrow. Meanwhile, Swiss bank UBS is planning to charge its super-rich clients for holding on to cash.

Dow Sheds 800 in Biggest Drop of Year

Dow Sheds 800 in Biggest Drop of Year U.S. stocks tumbled and Treasury markets sent a new recession signal after weak German and Chinese economic data stoked fears of an impending global slowdown.

Sub zero : grappling with the topsy turvy world of negative yields . Junior RBC analyst charged with insider trading. “There is concern that if there is some kind of resolution with the Taliban we may see something similar.” Additional reporting by Henry Foy in Moscow.

Topsy Turvy World is the fourth and final story arc from the third season of Rocky and Bullwinkle (originally broadcast as The Bullwinkle Show). It was broadcast on NBC during the 1961–1962 television season.

Sub zero: grappling with the topsy turvy world of negative yields © AP

Even large chunks of corporate bond markets now trade at sub-zero yields, including parts of the junk bond market (making a mockery of its “high yield” label). Emerging markets have not been immune either. Bonds issued by Poland, the Czech Republic and Hungary have joined the club.

Investors are now eyeing what could become the negative yield revolution’s next frontier — the biggest bond market of all.

“When the world economy next goes into hibernation, US Treasuries — the ultimate safe haven apart from gold — are unlikely to be an exception,” said Joachim Fels, global economic adviser at Pimco, the bond investing giant based in Newport Beach, California. “And if the trade war keeps escalating, we may get there faster than you think.”

Investors are grudgingly adjusting. After all, fund managers are used to operating in a universe where all interest rates are relative, and that goes for negative ones as well. If a central bank sets a base rate of minus 0.4 per cent, a yield of zero on an ultra-safe government bond might seem attractive.

A Danish bank is offering mortgages at a 0.5% negative interest rate — meaning it is basically paying people to borrow money

A Danish bank is offering mortgages at a 0.5% negative interest rate — meaning it is basically paying people to borrow money Denmark's third-largest bank said this week that customers will now be able to take out a 10-year fixed rate mortgage with an interest rate of -0.5%. "A few months ago, we would have said that this would not be possible, but we have been surprised time and time again," Jyske Bank housing economist Mikkel Høegh said. Offering loans at a negative rate may seem counterintuitive. But some banks are content to take a guaranteed small loss rather than risk bigger losses.

Topsy - Turvy (Japanese: ひっくりかえす Flip) is a non-damaging Dark-type move introduced in Generation VI. It is the signature move of Inkay and Malamar. Topsy - Turvy reverses all stat changes on the target Pokémon, making positive changes negative and negative changes positive.

Topsy Turvy is a common priest spell card, from The Boomsday Project set. Topsy Turvy can be obtained through The Boomsday Project card packs, through crafting, or as an Arena reward. Golden Topsy Turvy can also be obtained through the Highest Rank Bonus chest at the end of each Ranked

“Zero has just become another number — at least for markets if not in the real economy,” said Myles Bradshaw, head of global aggregate fixed income at Amundi, one of Europe’s biggest fund managers. “You can’t get a risk free rate above zero, and everything else is relative.”

Gallery: 12 reasons why there’ll be another financial crash, 12 reasons why there won't (Love Money)

Then there is subdued inflation, which makes fixed-income assets more attractive. Indeed, while negative nominal yields might seem mind-bendingly novel, negative “real” yields, adjusted for price rises, are relatively commonplace.

Jim Leaviss, head of retail fixed interest at M&G Investments in London, recalls saving his pocket money to buy Lego sets in the 1970s in a Post Office account which offered an interest rate of about 10 per cent. “Inflation was sometimes much higher than that, so it’s just an illusion your money is growing,” Mr Leaviss noted.

If central banks keep cutting rates — as the European Central Bank is expected to do in September — bond yields look likely to follow them lower. The old theory that zero would act as a floor for interest rates has been shattered. However, most analysts feel that there is still some kind of limit — just lower than they had thought before.

The three forces pinching emerging market equity returns

The three forces pinching emerging market equity returns Emerging market equities are behaving very oddly this year, but anyone betting on a bout of mean reversion could instead end up with burnt fingers. 

In the topsy - turvy world of negative rates that scenario could have become a reality if the drinks company Japan followed Switzerland in selling a 10-year bond with negative yields last week. On floating rate notes, they said negative coupons have usually paid zero because the issuer set a floor

A Topsy Turvy World . Disorder shall prevail thanks to Sister Entropy. Your love for me is grander, for you love me- a lowly ant of no consequence- whilst you have so much to love and so many to care for. A/n: Today’s inspiration came from the song “Aik Alif” by Noori feat.

“How low you can set rates depends on at what point you start being counterproductive,” said Adam Posen, a former Bank of England policymaker who is now president of the Peterson Institute for International Economics.

There are several reasons to think that point might be close — or even that it has arrived already in economies like Switzerland, where rates are currently at minus 0.75 per cent. At some point, savers will prefer to lock banknotes away in a vault rather than submit to punitive, negative rates, Mr Posen argues.

That means investors may not be able to ride the wave of negative yields much further. Although bond yields have been at historically low levels for years, fund managers have more than made up for lack of yield with hefty price gains on their portfolios as bonds rallied. Once the price gains fizzle out, they will be left contemplating an exceptionally bleak bond investing landscape.

“I’m worried you become dependent on lower and lower rates,” said Mr Hoffman. “It feels like the bond market is suffering some kind of panic attack. But what happens when rates go up? It’s a dangerous game.”

Explore the issues faced by the UK’s most vulnerable children and young people this summer and discover what you can do to help.

Miranda Lambert claps back at troll who said her marriage 'won't last'.
Miranda Lambert has hit back at an online troll's claim her marriage to New York Police Department officer Brendan McLoughlin won't last. The country superstar wed the NYPD officer in January, just two months after they met in the Big Apple when Miranda performed on Good Morning America with her group the Pistol Annies. And while the couple is all loved up, some fans are sceptical of the union. On Sunday, The House That Built Me star shared a sweet clip of her beau cooking on an outside grill on Instagram, writing in the caption: "FYI The New Yorker took to the cast iron skillet just fine!" While a number of fans flocked to send the happy couple well wishes, it was one fan's

—   Share news in the SOC. Networks

Topical videos:

usr: 9
This is interesting!