Investors are paying to hold large chunks of European government debt — something that would have sounded absolutely absurd in 2011 or 2012. Roughly half of certain bond classes in the euro area now offer negative rates, according to Goldman Sachs. http://www.businessinsider.com/inve...european-government-debt-2015-4#ixzz3XIe6UCdz
Speaking of negative yields those will be here in the US soon, since the fed and yellen are backed into a corner and have no way out during the next collapse with rates already at 0% the only thing they can do is go negative and thats where its headed....negative interest rates and QE 4 during the next collapse....get ready for it because its going to be quite a magic show...
Because they see rates going lower still. Sheer lunacy, all thanks to central banks. When the ECB's QE is set to gobble up all European issuance, well then it's time to front run!
Im going with 4000-5000 on the s$p if that happens, 3000 would happen within months of negative interest rates, within 1 year the s$p would surge an easy 50%....no where to go but up.
It's a great way to tax savers. Hit them with negative yields. If governments are able to find people/institutions dumb enough to buy negative yielding debt, why shouldn't they sell as much of it as possible? You gotta be a little smarter in times like these where governments are actively using financial repression to save their own skin. Not every period of time is going to be like the 80's and 90's where you couldn't lose with virtually any equity or bond investment.
Negative yields push ordinary people to the stock markets. But for most of the ordinary people it would be better to stay in negative yields. The stock market will create a new bubble. And history learns us that ordinary people take big hits in bubbles. Much bigger than the negative yield they try to escape from. L'histoire se répète.
thats the problem, everyone is chasing returns in the markets, if you are the 1% or rich you are chasing returns in start ups, venture capital, real estate, the dollar, etc, and the only returns for ordinary people is the stock market, which we all know most don't want to go near since they lost their life savings in it just 7 years ago and before that lost it again in 2000... who wants a CD paying 1% in 12 months when you can get 1% in a week in the market, thats where the problem lies, savers aren't getting anything, they are considered scum now that BUBBLE ben bernanke, yellen and friends have created this massive scheme to keep rates at ZERO and pump trillions into the markets to keep wall street happy, not only that but all the other world banks are doing the same exact thing, they believe it works, they believe it creates an opportunity when all its doing is creating the inevitable collapse, until then the world markets have pushed only higher on the backs of the money printing banks, now global equity markets are valued at $70 Trillion, a number never seen before, higher than the $65 trillion dollars back before the crisis set in 2008-2009....the addiction is here, there is no way it can be stopped now until the markets collapse and everyone realizes that there is no fix. Every central bank has backed themselves into a corner, they don't know it yet but will know once economies start to collapse....until then its smooth sailing ahead, but let me tell you the next crisis is going to bring negative interest rates to everyone and everything, its already happening in europe and will slowly spread out to other parts of the world especially here in the US, yellen isnt raising rate now or the next 5 or 10 years, if anything she is going to push them further down because she hasn't a clue how bad the next crisis is going to be, its going to be something the world has never witnessed, QE and free bailouts and the printing press won't help the next time around....thats a fact.
...in which case, the man on the street should be fully invested in stocks, probably through an index tracker.
50% up from here is approx 3000. The interesting thing is IF we pretty much know that rates are going neg and therefore stocks will go through the roof from these levels, it could be time to make an absolute fortune....