# Why does Anyone Buy Negative Interest Bonds?



## william the wie

This is something I cannot make sense out of. So, have at it.


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## HenryBHough

One thing:

Stupidity.

That's why negative interest bonds are all the rage with liberals.


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## Dekster

The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.


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## boedicca

Dekster said:


> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.




And if cash is outlawed....as is happening in Europe.


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## Dekster

boedicca said:


> Dekster said:
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> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.
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> And if cash is outlawed....as is happening in Europe.
Click to expand...


It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.


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## justinacolmena

Why invest in negative interest bonds?

It's other people's money.

Sometimes trust or endowment funds or the like *must* be invested according to some institutional mission or mandate despite what would seem to us as ordinary common-sense rules of sanity.


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## Cellblock2429

william the wie said:


> This is something I cannot make sense out of. So, have at it.


/----/
Why Would Anyone Buy Negative Interest Rate Bonds? --  The Motley Fool
...you're asking why do people do this, because they are doing it. And to try to answer the question briefly here, as we close, the answer is that traditionally, bonds are kind of an offset to the stock market. The reason some people think you should be diversified into bonds is *because when stocks go down, bonds often don't. And so if you are a large asset manager, and you're trying to park lots of cash different ways and keep yourself safe and balanced, then you have appreciated having something that protects you in the one out of three years where the stock market loses value.

BTW Swiss bank accounts pay negative interest too. It’s the cost of hiding money. *


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## william the wie

Dekster said:


> boedicca said:
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> Dekster said:
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> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.
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> And if cash is outlawed....as is happening in Europe.
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> Click to expand...
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> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
Click to expand...


Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.


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## william the wie

Cellblock2429 said:


> william the wie said:
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> This is something I cannot make sense out of. So, have at it.
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> /----/
> Why Would Anyone Buy Negative Interest Rate Bonds? --  The Motley Fool
> ...you're asking why do people do this, because they are doing it. And to try to answer the question briefly here, as we close, the answer is that traditionally, bonds are kind of an offset to the stock market. The reason some people think you should be diversified into bonds is *because when stocks go down, bonds often don't. And so if you are a large asset manager, and you're trying to park lots of cash different ways and keep yourself safe and balanced, then you have appreciated having something that protects you in the one out of three years where the stock market loses value.*
Click to expand...


I can see how low yield bond substitutes such as REITs and Utilities would work but since many DRIPs of these issues often provide discounts on direct and reinvested dividend purchases that looks like it provides much more down side protection than negative interest rate bonds.


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## Dekster

william the wie said:


> Dekster said:
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> boedicca said:
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> Dekster said:
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> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.
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> And if cash is outlawed....as is happening in Europe.
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> Click to expand...
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> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> Click to expand...
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
Click to expand...


I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.


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## Dekster

Cellblock2429 said:


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> boedicca said:
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> Dekster said:
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> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.
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> And if cash is outlawed....as is happening in Europe.
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> Click to expand...
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> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> Click to expand...
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
Click to expand...

I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there


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## Dekster

Cellblock2429 said:


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> william the wie said:
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> Dekster said:
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> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> 
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
> 
> Click to expand...
> 
> I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there
> 
> Click to expand...
> 
> /——-/ You can get to Cubs via Mexico. If you hurry you can be there in time to get work harvesting the sugar cane crops, Viva la Revolution.
Click to expand...



Can't.  Trump built a wall and trapped me here.  Convincing people it was to keep others out when it was really to keep us in was brilliant on his part.  We are now all prisoners of der Führer


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## Crepitus

william the wie said:


> This is something I cannot make sense out of. So, have at it.


The only reason I could see would be of the economy was going into recession and they were losing less than other things, in other words being relatively safe.


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## percysunshine

Who cares what it is?

If I can buy it today, and then sell it tomorrow for a profit...meh


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## boedicca

Dekster said:


> william the wie said:
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> boedicca said:
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> Dekster said:
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> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.
> 
> 
> 
> 
> 
> And if cash is outlawed....as is happening in Europe.
> 
> Click to expand...
> 
> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> Click to expand...
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
Click to expand...



Irony is ironic.   You couldn't post here on the interwebs without America's pursuit of innovation and growth.   If you want to live a Bronze Age lifestyle, do it yourself and leave the rest of us alone.


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## boedicca

Dekster said:


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> william the wie said:
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> boedicca said:
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> And if cash is outlawed....as is happening in Europe.
> 
> 
> 
> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> Click to expand...
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
> 
> Click to expand...
> 
> I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there
Click to expand...



How unimaginative of you. I'm pretty sure you could just walk across the Venezuelan border and live in the Utopia you desire.


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## Dekster

boedicca said:


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> william the wie said:
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> boedicca said:
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> Dekster said:
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> The two biggest reasons are that they have to hold them because of government regulations or because they think the economy is turning south and it is a safe place to put money to mitigate loss.
> 
> 
> 
> 
> 
> And if cash is outlawed....as is happening in Europe.
> 
> Click to expand...
> 
> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> Click to expand...
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> 
> 
> Irony is ironic.   You couldn't post here on the interwebs without America's pursuit of innovation and growth.   If you want to live a Bronze Age lifestyle, do it yourself and leave the rest of us alone.
Click to expand...


Irony is ironic.  That we have an internet just creates even more opportunity for managed degrowth.  Look at how Amazon is destroying bricks and mortar stores.  Telemarketers and tech support come to you from India.  Phone sex operators laid the groundwork for people working from home.  DO that on a larger scale, and we can build fewer highways.


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## Dekster

boedicca said:


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> william the wie said:
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> Dekster said:
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> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> 
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
> 
> Click to expand...
> 
> I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there
> 
> Click to expand...
> 
> 
> 
> How unimaginative of you. I'm pretty sure you could just walk across the Venezuelan border and live in the Utopia you desire.
Click to expand...

 
Venezuela is not next door to Virginia.


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## boedicca

Dekster said:


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> william the wie said:
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> Dekster said:
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> boedicca said:
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> And if cash is outlawed....as is happening in Europe.
> 
> 
> 
> 
> It was really more done in Japan and parts of Europe to try to keep people from parking their money in banks for very long.  Banks park their money in central banks, so negative interest tries to shake the money back into circulation.  Both places risk stagflation.
> 
> Click to expand...
> 
> 
> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> Click to expand...
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> 
> 
> Irony is ironic.   You couldn't post here on the interwebs without America's pursuit of innovation and growth.   If you want to live a Bronze Age lifestyle, do it yourself and leave the rest of us alone.
> 
> Click to expand...
> 
> 
> Irony is ironic.  That we have an internet just creates even more opportunity for managed degrowth.  Look at how Amazon is destroying bricks and mortar stores.  Telemarketers and tech support come to you from India.  Phone sex operators laid the groundwork for people working from home.  DO that on a larger scale, and we can build fewer highways.
Click to expand...



Oh blah blah blah so sleepy....zzzzz.

Nobody is forcing you to use the internet, and yet, Here You Are.


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## boedicca

Dekster said:


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> william the wie said:
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> Japan is already in stagnation and parts of Europe as well. A decent case can be made that parts of China are too. If Trump can get most of his agenda enacted the US may missout on this problem.
> 
> 
> 
> 
> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> Click to expand...
> 
> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
> 
> Click to expand...
> 
> I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there
> 
> Click to expand...
> 
> 
> 
> How unimaginative of you. I'm pretty sure you could just walk across the Venezuelan border and live in the Utopia you desire.
> 
> Click to expand...
> 
> 
> Venezuela is not next door to Virginia.
Click to expand...



You can easily fly to Colombia and then cross the border.  Jeebus, how do you survive with such a lack of initiative?


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## Dekster

boedicca said:


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> Dekster said:
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> I support stagnation.  In fact, I support purposeful, managed degrowth.  America consumes too much.  The pursuit of more dollars to pay for too much is ruining people's psyche.
> 
> 
> 
> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
> 
> Click to expand...
> 
> I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there
> 
> Click to expand...
> 
> 
> 
> How unimaginative of you. I'm pretty sure you could just walk across the Venezuelan border and live in the Utopia you desire.
> 
> Click to expand...
> 
> 
> Venezuela is not next door to Virginia.
> 
> Click to expand...
> 
> 
> 
> You can easily fly to Colombia and then cross the border.  Jeebus, how do you survive with such a lack of initiative?
Click to expand...


I will take your word for it.  I am sure you are an expert at sneaking across borders, amigo.


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## boedicca

Dekster said:


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> /—-/ You want stagnation? Move to Cuba and leave us the fu*k alone to prosper. You idiot
> 
> 
> 
> I want degrowth.  American "prosperity" is an illusion created by a hyper-inflated stock market.  As for Cuba, no luck.  Trump has greatly restricted people's ability to go there
> 
> Click to expand...
> 
> 
> 
> How unimaginative of you. I'm pretty sure you could just walk across the Venezuelan border and live in the Utopia you desire.
> 
> Click to expand...
> 
> 
> Venezuela is not next door to Virginia.
> 
> Click to expand...
> 
> 
> 
> You can easily fly to Colombia and then cross the border.  Jeebus, how do you survive with such a lack of initiative?
> 
> Click to expand...
> 
> 
> I will take your word for it.  I am sure you are an expert at sneaking across borders, amigo.
Click to expand...



No, I believe in the rule of law.   You support regimes which don't.  But worst of all, you are incredibly boring.  So, toodles.


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## Mac1958

I can think of two reasons:

First, there are many institutional investors who have to buy bonds no matter what, because it's in their charter to do so and/or they have to use them as collateral.

Second might be some kind of weird foreign currency arbitrage, where the yield on the bond is less important than anticipated movement between two currencies.

Is sure does seem counter-intuitive, that's for sure.
.


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## Toddsterpatriot

Mac1958 said:


> I can think of two reasons:
> 
> First, there are many institutional investors who have to buy bonds no matter what, because it's in their charter to do so and/or they have to use them as collateral.
> 
> Second might be some kind of weird foreign currency arbitrage, where the yield on the bond is less important than anticipated movement between two currencies.
> 
> Is sure does seem counter-intuitive, that's for sure.
> .



Eurozone banks buy them to make their risk adjusted capital requirements.


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## The Banker

william the wie said:


> This is something I cannot make sense out of. So, have at it.


There's more to a bond than just the small interest rate gain or loss that comes with them.  Bonds are a commodity essentially like gold.  The majority of people buy bonds because they think they will go up- based on economic factors, or chart patterns- so they know they can make money off the trade.

They buy bonds now, the ECB increases stimulus, and the value of the bonds goes up, so they sell said bonds to other people and make a profit.

That is why they buy bonds that have a negative yield.


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## Picaro

They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.


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## Socratica

Picaro said:


> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.



If you're a fixed income investor, you care about the real return. Not the nominal return.


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## Toddsterpatriot

Picaro said:


> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.



*They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*

If the rate is negative, they're paying above face value.


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## Picaro

Toddsterpatriot said:


> Picaro said:
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> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
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> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
Click to expand...


Wrong.


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## Picaro

https://seekingalpha.com/article/4274437-expansion-assets-negative-nominal-interest-rates

*Buried in the Weekend section of the Financial Times is a report that the aggregate value of assets that earn negative nominal yields has substantially expanded since the beginning of 2019 and has reached a new high. So, on January 1, 2019, the value of these assets was at $8.3 trillion. As of six months later, it had reached $13 trillion, a more than 50 percent increase. There are fewer assets around that have negative yields than a few years ago, but the amount of money in them has grown, and the depth of some of the negative interest rates has deepened. It used to be said that -0.5 percent was a lower bound, but some Swiss franc bonds are down to -0.8 percent. The main ten-year German government bond's yield has fallen to -0.4 percent.*

I didn't realize they were growing that much. No surprise at the Swiss rates, though.


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## Toddsterpatriot

Picaro said:


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> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
Click to expand...


Explain my error.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
Click to expand...


Did you ever figure out how to buy a negative interest rate bond without paying above face value?

Let me know...…..


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
Click to expand...


Still nothing?


----------



## Picaro

Toddsterpatriot said:


> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
Click to expand...


Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.


----------



## Darkwind

Sounds like a scheme on the order of the derivatives on mortgages.  We all witnessed how well that worked out.


----------



## Darkwind

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just thin you do.
Click to expand...

Really?

So if I buy $100 of a negative bond and it constricts by 1% over the first year, that bond is now worth $99.00.

I paid MORE than the face value of the bond's final value.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
Click to expand...


Why do I need to read a book for you to explain my error?

Or just admit I was right.


----------



## Picaro

Darkwind said:


> Sounds like a scheme on the order of the derivatives on mortgages.  We all witnessed how well that worked out.



It's the natural result of having huge surpluses of money sitting at the top of the food chain with nowhere to go, nothing to absorb investments with any returns worth locking up long term capital. It's essentially a storage fee for those who need them in some sort of stable currency and a banking system, which isn't nearly as common as some here seem to think, so, they offer instruments paying a small negative interest rate. It's not rocket science; Swiss Francs, Euros, and U.S. dollars are popular havens. Note the big increases in foreign investments in the U.S. since the tariffs were imposed, and the factories fleeing Red China, and the money fleeing Red China's banking systems.


----------



## Picaro

Toddsterpatriot said:


> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
Click to expand...


Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?


----------



## Darkwind

Picaro said:


> Darkwind said:
> 
> 
> 
> Sounds like a scheme on the order of the derivatives on mortgages.  We all witnessed how well that worked out.
> 
> 
> 
> 
> It's the natural result of having huge surpluses of money sitting at the top of the food chain with nowhere to go, nothing to absorb investments with any returns worth locking up long term capital. It's essentially a storage fee for those who need them in some sort of stable currency and a banking system, which isn't nearly as common as some here seem to think, so, they offer instruments paying a small negative interest rate. It's not rocket science; Swiss Francs, Euros, and U.S. dollars are popular havens. Note the big increases in foreign investments in the U.S. since the tariffs were imposed, and the factories fleeing Red China, and the money fleeing Red China's banking systems.
Click to expand...

Seems that similar logic was used in the housing bubble that caused the great recession.  

Either way, I don't have the time right now to get into an in-depth analysis of this.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> 
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
Click to expand...

*Why should I school you for free?*

For the satisfaction of proving me wrong.

Here's an exercise for you:

I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.

What is the lowest price someone could buy them from me in order for him to have a negative YTM?

Thanks in advance!! 

Unless you're gonna run away......again.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
Click to expand...







but once it starts trading, high demand by investors can push its price up -- and therefore its yield down -- to such an extent that buyers no longer receive any payment.


Bloomberg - Are you a robot?

DURR...……….


----------



## The Banker

Darkwind said:


> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> They aren't 'negative interest rates' if they're denominated in, say, U.S. dollars or Euros versus, say, Red Chinese yuans; they're excellent hedges for those with lots of unstable currencies, like rubles and the like. Contrary to popular belief, even with the ridiculously loose GAAP rules we have now there isn't an unlimited supply of solid convertible paper out there available to those in less than stable countries. They are also discounted, and nobody is paying the face values, at least at the wholesale levels. A 'loss' of 1 or 2% a year is probably less than they would lose to inflation and currency devaluation losses if left in a govt. bank. Singapore's banks are a major retail outlet for them. I'm sure there are more than few  big customers  in Hong Kong for them right now.
> 
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> Click to expand...
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just thin you do.
> 
> Click to expand...
> 
> Really?
> 
> So if I buy $100 of a negative bond and it constricts by 1% over the first year, that bond is now worth $99.00.
> 
> I paid MORE than the face value of the bond's final value.
Click to expand...

NOOOO

You need to learn how bonds work.
Bonds are a commodity or asset, just like gold, stocks etc.  They just happen to give an interest rate return (coupon), which can be positive or negative.

If you buy a bond for 90 with a -1% rate coupon and then many many more people buy that same bond and the price of the bond goes up to 110, and the coupon goes to -1.2% (the coupon rate drops as people buy the bond hence the negative rate to begin with lots of demand)  would you care about the little -1.2% return or the massive 20+% return on the value of the actual bond?


BONDS HAVE AN PRICE LIKE A STOCK OR COMMODITY, they also have an interest rate coupon.


----------



## The Banker

Toddsterpatriot said:


> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Wrong.
> 
> 
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
Click to expand...

You don't understand bonds at all.  Bonds are still a supply and demand asset.

Bonds have a coupon AND a value like a stock or commodity.  Look up /ZN or /ZB, that is the chart for the US 10 yr and 30 yr bond futures,  look how it changes.  As the value goes up the coupon gets smaller.

BUT LOTS LOTS LOTS of people buy bonds not to hold them and collect the small coupon, but to trade them.  They buy them anticipating the FED is going to have to cut rates etc, then everyone else buys them and the value of the bond goes up 5%, 10%, 20% etc.  The small coupon means nothing and they just made a nice profit.  They are a supply and demand asset, like stocks.

WIth all due respect you really don't understand bonds.


----------



## Toddsterpatriot

The Banker said:


> Darkwind said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *They are also discounted, and nobody is paying the face values, at least at the wholesale levels.*
> 
> If the rate is negative, they're paying above face value.
> 
> 
> 
> 
> Wrong.
> 
> Click to expand...
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just thin you do.
> 
> Click to expand...
> 
> Really?
> 
> So if I buy $100 of a negative bond and it constricts by 1% over the first year, that bond is now worth $99.00.
> 
> I paid MORE than the face value of the bond's final value.
> 
> Click to expand...
> 
> NOOOO
> 
> You need to learn how bonds work.
> Bonds are a commodity or asset, just like gold, stocks etc.  They just happen to give an interest rate return (coupon), which can be positive or negative.
> 
> If you buy a bond for 90 with a -1% rate coupon and then many many more people buy that same bond and the price of the bond goes up to 110, and the coupon goes to -1.2% (the coupon rate drops as people buy the bond hence the negative rate to begin with lots of demand)  would you care about the little -1.2% return or the massive 20+% return on the value of the actual bond?
> 
> 
> BONDS HAVE AN PRICE LIKE A STOCK OR COMMODITY, they also have an interest rate coupon.
Click to expand...


*If you buy a bond for 90 with a -1% rate coupon*

You have a list of the bonds that require the purchaser to pay the seller interest each year? Thanks!!


----------



## Toddsterpatriot

The Banker said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> 
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> You don't understand bonds at all.  Bonds are still a supply and demand asset.
> 
> Bonds have a coupon AND a value like a stock or commodity.  Look up /ZN or /ZB, that is the chart for the US 10 yr and 30 yr bond futures,  look how it changes.  As the value goes up the coupon gets smaller.
> 
> BUT LOTS LOTS LOTS of people buy bonds not to hold them and collect the small coupon, but to trade them.  They buy them anticipating the FED is going to have to cut rates etc, then everyone else buys them and the value of the bond goes up 5%, 10%, 20% etc.  The small coupon means nothing and they just made a nice profit.  They are a supply and demand asset, like stocks.
> 
> WIth all due respect you really don't understand bonds.
Click to expand...


*Bonds are still a supply and demand asset.*

That is awesome!!! Truly. 

What in any of my posts made you believe I disagree with supply and demand?


----------



## Picaro

Toddsterpatriot said:


> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Wrong.
> 
> 
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> Click to expand...
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
Click to expand...


Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.


----------



## The Banker

Toddsterpatriot said:


> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> 
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> You don't understand bonds at all.  Bonds are still a supply and demand asset.
> 
> Bonds have a coupon AND a value like a stock or commodity.  Look up /ZN or /ZB, that is the chart for the US 10 yr and 30 yr bond futures,  look how it changes.  As the value goes up the coupon gets smaller.
> 
> BUT LOTS LOTS LOTS of people buy bonds not to hold them and collect the small coupon, but to trade them.  They buy them anticipating the FED is going to have to cut rates etc, then everyone else buys them and the value of the bond goes up 5%, 10%, 20% etc.  The small coupon means nothing and they just made a nice profit.  They are a supply and demand asset, like stocks.
> 
> WIth all due respect you really don't understand bonds.
> 
> Click to expand...
> 
> 
> *Bonds are still a supply and demand asset.*
> 
> That is awesome!!! Truly.
> 
> What in any of my posts made you believe I disagree with supply and demand?
Click to expand...

Because you don't seem to understand that people are buying these negative rate bonds and making large profits on them negating the little negative coupon.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
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> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> 
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
Click to expand...


*Proving you wrong has never been an interesting challenge*

And yet, you consistently fail to do so.


----------



## Toddsterpatriot

The Banker said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> The Banker said:
> 
> 
> 
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> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> 
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> You don't understand bonds at all.  Bonds are still a supply and demand asset.
> 
> Bonds have a coupon AND a value like a stock or commodity.  Look up /ZN or /ZB, that is the chart for the US 10 yr and 30 yr bond futures,  look how it changes.  As the value goes up the coupon gets smaller.
> 
> BUT LOTS LOTS LOTS of people buy bonds not to hold them and collect the small coupon, but to trade them.  They buy them anticipating the FED is going to have to cut rates etc, then everyone else buys them and the value of the bond goes up 5%, 10%, 20% etc.  The small coupon means nothing and they just made a nice profit.  They are a supply and demand asset, like stocks.
> 
> WIth all due respect you really don't understand bonds.
> 
> Click to expand...
> 
> 
> *Bonds are still a supply and demand asset.*
> 
> That is awesome!!! Truly.
> 
> What in any of my posts made you believe I disagree with supply and demand?
> 
> Click to expand...
> 
> Because you don't seem to understand that people are buying these negative rate bonds and making large profits on them negating the little negative coupon.
Click to expand...


*Because you don't seem to understand that people are buying these negative rate bonds and making large profits on them *

You think the European banks holding much of their negative rate debt are making large profits on them? LOL!

*negating the little negative coupon.*

You find that list of bonds with a negative coupon yet?


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
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> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
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> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> Did you ever figure out how to buy a negative interest rate bond without paying above face value?
> 
> Let me know...…..
> 
> 
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> Click to expand...
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
Click to expand...


*Proving you wrong has never been an interesting challenge*

Are you Picaro's brother?


----------



## Picaro

Toddsterpatriot said:


> Picaro said:
> 
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> Toddsterpatriot said:
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> Picaro said:
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> Toddsterpatriot said:
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> Picaro said:
> 
> 
> 
> Read a book on how bond markets work. We've established long ago you have no idea how anything to do with business, finance, or markets work, you just think you do; playing " I Touched You Last!!!' with dumbasses is something I do in my spare time when nothing else is going on.
> 
> 
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> Click to expand...
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
> 
> Click to expand...
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
Click to expand...


Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
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> Picaro said:
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> 
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> Toddsterpatriot said:
> 
> 
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> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> Why do I need to read a book for you to explain my error?
> 
> Or just admit I was right.
> 
> 
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> Click to expand...
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
> 
> Click to expand...
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
> 
> Click to expand...
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
Click to expand...


*can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *

I already explained why. Banks buy them to make their capital requirements.

Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?

Unless you're going to run away again? LOL!


----------



## The Banker

Toddsterpatriot said:


> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Why should I school you for free? It's obvious you never read anything now, so why bother with your ideological rubbish just because you ask?
> 
> 
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> Click to expand...
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
> 
> Click to expand...
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
> 
> Click to expand...
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> Click to expand...
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
Click to expand...

You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...

This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.


----------



## BuckToothMoron

william the wie said:


> This is something I cannot make sense out of. So, have at it.



It’s the greater fool theory- they expect the price to go up, or said another way, they expect money to get even cheaper. The world wide investment climate is perverse. Investors are now buying stocks for stability and bonds for growth. Hey mr. Shit, meet Mr. Fan.


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## Toddsterpatriot

The Banker said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> 
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
> 
> Click to expand...
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
> 
> Click to expand...
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> Click to expand...
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> Click to expand...
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
Click to expand...


*When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *

Depends on the maturity, of course. 





Looks like the 10 year Bunds had a positive yield in November.

*much more than the little -0.25% that the bund has.*

You send a check to the German government every year to pay them 0.25%?


----------



## Toddsterpatriot

The Banker said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *Why should I school you for free?*
> 
> For the satisfaction of proving me wrong.
> 
> Here's an exercise for you:
> 
> I hold two 2 year notes. One has a 0% coupon, the other has a 1% coupon.
> 
> What is the lowest price someone could buy them from me in order for him to have a negative YTM?
> 
> Thanks in advance!!
> 
> Unless you're gonna run away......again.
> 
> 
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
> 
> Click to expand...
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
> 
> Click to expand...
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> Click to expand...
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> Click to expand...
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
Click to expand...







That's a chart of US 10 years.....never went negative.


----------



## The Banker

Toddsterpatriot said:


> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Proving you wrong has never been an interesting challenge. Nobody runs form you, you just bore them and they ignore you.
> 
> 
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
> 
> Click to expand...
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> Click to expand...
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> Click to expand...
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
> 
> Click to expand...
> 
> 
> *When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *
> 
> Depends on the maturity, of course.
> 
> View attachment 270739
> 
> Looks like the 10 year Bunds had a positive yield in November.
> 
> *much more than the little -0.25% that the bund has.*
> 
> You send a check to the German government every year to pay them 0.25%?
Click to expand...

*Bond Yield* Vs. Price
*As bond* prices *increase*, *bond yields fall*.

You definitely don't understand bonds.  as the yield on the Bund drops to -0.25% the PRICE of the bond increases.  This is the basics of bonds, you really have no clue what is going on here.  You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.


To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop.  If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%.  understand.

You are lucky to have met me, now you have learned something.


----------



## The Banker

_FOR ALL THE BOND BEGINERS_


Bond prices and yields move in opposite directions, which you may find confusing if you're new to bond investing. Bond prices and yields act like a seesaw: when bond yields go up, prices go down, and when bond yields go down, prices go up.

Bond Prices and Yields Move in Opposite Directions


----------



## Toddsterpatriot

The Banker said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *Proving you wrong has never been an interesting challenge*
> 
> And yet, you consistently fail to do so.
> 
> 
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> Click to expand...
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> Click to expand...
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
> 
> Click to expand...
> 
> 
> *When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *
> 
> Depends on the maturity, of course.
> 
> View attachment 270739
> 
> Looks like the 10 year Bunds had a positive yield in November.
> 
> *much more than the little -0.25% that the bund has.*
> 
> You send a check to the German government every year to pay them 0.25%?
> 
> Click to expand...
> 
> *Bond Yield* Vs. Price
> *As bond* prices *increase*, *bond yields fall*.
> 
> You definitely don't understand bonds.  as the yield on the Bund drops to -0.25% the PRICE of the bond increases.  This is the basics of bonds, you really have no clue what is going on here.  You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.
> 
> 
> To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop.  If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%.  understand.
> 
> You are lucky to have met me, now you have learned something.
Click to expand...


*You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.*

You mean the Bund trades above par? Don't tell Picaro. LOL!

*You are lucky to have met me, now you have learned something.*





Teach me more about your claim that a bond trading at 90 can have a -1% coupon.

You know what a coupon is, right?


----------



## Picaro

Toddsterpatriot said:


> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> 
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> Click to expand...
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
> 
> Click to expand...
> 
> 
> *When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *
> 
> Depends on the maturity, of course.
> 
> View attachment 270739
> 
> Looks like the 10 year Bunds had a positive yield in November.
> 
> *much more than the little -0.25% that the bund has.*
> 
> You send a check to the German government every year to pay them 0.25%?
> 
> Click to expand...
> 
> *Bond Yield* Vs. Price
> *As bond* prices *increase*, *bond yields fall*.
> 
> You definitely don't understand bonds.  as the yield on the Bund drops to -0.25% the PRICE of the bond increases.  This is the basics of bonds, you really have no clue what is going on here.  You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.
> 
> 
> To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop.  If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%.  understand.
> 
> You are lucky to have met me, now you have learned something.
> 
> Click to expand...
> 
> 
> *You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.*
> 
> You mean the Bund trades above par? Don't tell Picaro. LOL!
> 
> *You are lucky to have met me, now you have learned something.*
> 
> View attachment 270740
> 
> Teach me more about your claim that a bond trading at 90 can have a -1% coupon.
> 
> You know what a coupon is, right?
Click to expand...


Here is an example of someone who is clueless on a topic, and goes Google Scholaring and cut and pasting in an attempt to save face, and *still* gets it wrong, even after googling and having it explained in plain English to them.


----------



## Toddsterpatriot

Picaro said:


> Toddsterpatriot said:
> 
> 
> 
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> 
> The Banker said:
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> 
> 
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> Toddsterpatriot said:
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> The Banker said:
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> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> 
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
> 
> Click to expand...
> 
> 
> *When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *
> 
> Depends on the maturity, of course.
> 
> View attachment 270739
> 
> Looks like the 10 year Bunds had a positive yield in November.
> 
> *much more than the little -0.25% that the bund has.*
> 
> You send a check to the German government every year to pay them 0.25%?
> 
> Click to expand...
> 
> *Bond Yield* Vs. Price
> *As bond* prices *increase*, *bond yields fall*.
> 
> You definitely don't understand bonds.  as the yield on the Bund drops to -0.25% the PRICE of the bond increases.  This is the basics of bonds, you really have no clue what is going on here.  You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.
> 
> 
> To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop.  If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%.  understand.
> 
> You are lucky to have met me, now you have learned something.
> 
> Click to expand...
> 
> 
> *You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.*
> 
> You mean the Bund trades above par? Don't tell Picaro. LOL!
> 
> *You are lucky to have met me, now you have learned something.*
> 
> View attachment 270740
> 
> Teach me more about your claim that a bond trading at 90 can have a -1% coupon.
> 
> You know what a coupon is, right?
> 
> Click to expand...
> 
> 
> Here is an example of someone who is clueless on a topic, and goes Google Scholaring and cut and pasting in an attempt to save face, and *still* gets it wrong, even after googling and having it explained in plain English to them.
Click to expand...


You figure out how a bond can have a negative YTM without trading above par?

LOL!

Moron.


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## The Banker

Toddsterpatriot said:


> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> Picaro said:
> 
> 
> 
> Yeah right, says the guy who can't figure out why negative interests rate central bank bonds are  well over a $7 trillion dollar market now. Yawn.
> 
> 
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> Click to expand...
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
> 
> Click to expand...
> 
> 
> *When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *
> 
> Depends on the maturity, of course.
> 
> View attachment 270739
> 
> Looks like the 10 year Bunds had a positive yield in November.
> 
> *much more than the little -0.25% that the bund has.*
> 
> You send a check to the German government every year to pay them 0.25%?
> 
> Click to expand...
> 
> *Bond Yield* Vs. Price
> *As bond* prices *increase*, *bond yields fall*.
> 
> You definitely don't understand bonds.  as the yield on the Bund drops to -0.25% the PRICE of the bond increases.  This is the basics of bonds, you really have no clue what is going on here.  You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.
> 
> 
> To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop.  If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%.  understand.
> 
> You are lucky to have met me, now you have learned something.
> 
> Click to expand...
> 
> 
> *You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.*
> 
> You mean the Bund trades above par? Don't tell Picaro. LOL!
> 
> *You are lucky to have met me, now you have learned something.*
> 
> View attachment 270740
> 
> Teach me more about your claim that a bond trading at 90 can have a -1% coupon.
> 
> You know what a coupon is, right?
Click to expand...

IT wouldn't it would be over 100, I mistyped.  The point is that it doesn't matter you buy at 110, and sell at 125 as rates go even more negative, and make a big profit.  That is why people are buying them.  The negative coupon is priced into the asset and the asset still increases in value


----------



## Toddsterpatriot

The Banker said:


> Toddsterpatriot said:
> 
> 
> 
> 
> 
> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> 
> 
> The Banker said:
> 
> 
> 
> 
> 
> Toddsterpatriot said:
> 
> 
> 
> *can't figure out why negative interests rate central bank bonds are well over a $7 trillion dollar market now. *
> 
> I already explained why. Banks buy them to make their capital requirements.
> 
> Hey, did you ever figure out how a bond has a negative yield if it doesn't trade above par?
> 
> Unless you're going to run away again? LOL!
> 
> 
> 
> You still don't get it.  When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, much more than the little -0.25% that the bund has...
> 
> This is why people buy bonds with negative rates, because they think they will go more negative, and thus make a big profit.
> 
> View attachment 270738
> 
> Click to expand...
> 
> 
> *When you buy a bond and there is a rally in bonds like we had globally starting in november you make a SUBSTANTIAL profit, *
> 
> Depends on the maturity, of course.
> 
> View attachment 270739
> 
> Looks like the 10 year Bunds had a positive yield in November.
> 
> *much more than the little -0.25% that the bund has.*
> 
> You send a check to the German government every year to pay them 0.25%?
> 
> Click to expand...
> 
> *Bond Yield* Vs. Price
> *As bond* prices *increase*, *bond yields fall*.
> 
> You definitely don't understand bonds.  as the yield on the Bund drops to -0.25% the PRICE of the bond increases.  This is the basics of bonds, you really have no clue what is going on here.  You need to study bonds if you don't know that the yield falls when the price increases then that is why you have no clue what is going on here.
> 
> 
> To be honest you just showed everyone how clueless you are right here, not knowing that price increases as yields drop.  If you buy a bond and the yields drop your bond is suddenly worth more because it has a 0.25% coupon, when they are currently selling for -0.25%.  understand.
> 
> You are lucky to have met me, now you have learned something.
> 
> Click to expand...
> 
> 
> *You definitely don't understand bonds. as the yield on the Bund drops to -0.25% the PRICE of the bond increases.*
> 
> You mean the Bund trades above par? Don't tell Picaro. LOL!
> 
> *You are lucky to have met me, now you have learned something.*
> 
> View attachment 270740
> 
> Teach me more about your claim that a bond trading at 90 can have a -1% coupon.
> 
> You know what a coupon is, right?
> 
> Click to expand...
> 
> IT wouldn't it would be over 100, I mistyped.  The point is that it doesn't matter you buy at 110, and sell at 125 as rates go even more negative, and make a big profit.  That is why people are buying them.  The negative coupon is priced into the asset and the asset still increases in value
Click to expand...


*The negative coupon is priced into the asset and the asset still increases in value *

Negative YTM, not negative coupon. Sheesh.


----------

