Negative Yield Debt Hits Record $15 Trillion, Up $1 Trillion in 2 Business Days

-edited

Negative yield debt madness accelerates. A new record high breached $15 trillion on Monday.

​Negative-Yielding Debt in Bloomberg Index


New Records

Highlights from Jim Bianco at Bianco Research.

Key Points

  1. Negative debt topped $15 Trillion today on Monday, up over $1 Trillion in two business days.
  2. Negative debt is now 27% of all developed country sovereign debt, a new record.
  3. Negative debt now 44% of of all developed countries excluding US sovereign debt.

Excluding US

Negative Yield Bond Matrix

Swiss 100-Year Bond

Germany

Global Bond Bubble

Thought of the Day

Another Thought of the Day

Thread of the Day

Logically Impossible

Negative debt implies a negative time preference. In the real world, that cannot happen.

In easy to understand terms, negative time preference means someone would rather have 90 cents ten years from now than a dollar today.

Such a construct is only possible with massive central bank intervention.

Anger

In regards to the above Tweet, please see US Treasury Declares China a Currency Manipulator Under Orders From Trump

Mike "Mish" Shedlock

Comments (16)
No. 1-8
Tony Bennett
Tony Bennett

"With German govt bonds, only one thing is certain: you will lose money w/them until you don't find another fool who buys the paper from you at a higher price before maturity."

...

Not necessarily.

Folks ALWAYS forgetting the currency component. Carry trade of borrowing in a depreciating currency and buying an asset priced in an appreciating currency. Germany gets a bonus since some traders are betting at some point Germany will walk away from euro and its debt will be repriced in marks (which would SOAR to remnant of euro). Still kicking myself for not buying bunds 5 or 6 years ago when I was seriously considering.

avidremainer
avidremainer

Given the chaos that reigns at the moment is it any wonder that socialism is on the march? It may be wrong headed but at least it is coherent. There is very little that can be called capitalism or free enterprise in the current system. There is corporatism, there are rentiers and price gauges running amok, there is a system in place to keep zombie banks, companies, and countries going but precious little free enterprise.

abend237-04
abend237-04

All bonds are a promise to pay. The current bond market, sovereigns included, are swamped by doubt and indifference. I doubt Argentine bonds and I'm indifferent to even AAA corporates due to the peanut returns.

I think bonds are now increasingly being used simply as capital storage bins, still better than a mattress. I've abandoned the promise to pay in favor of the promise to continue to produce, this in the form of well-managed, out of fashion, corporations with long records of growth and profitability Central bankers and fiat currency have finally made a believer out of this sucker; I'm out of bonds and expect a massive drawdown with the coming, much-delayed recession.

Bam_Man
Bam_Man

But...but... According to the BIS' own Capital Adequacy Rules, these are RISK FREE "assets". RISK FREE, except for the money you KNOW you are going to lose every year. LOL....

Bbbbbbb
Bbbbbbb

“In easy to understand terms, negative time preference means someone would rather have 90 cents ten years from now than a dollar today.”

Why? Because debt that can’t be paid, won’t be paid. And people who buy these bonds think that 90% will be more than what we will be paid 10 years from now on the “assets” (debt) they own. You’ve been yammering (correctly) about deflation resulting from the next collapse, and these yields are a clear indication that many capitalists agree with you.

HubbaBuba2
HubbaBuba2

Here's your crappy job: A bond salesman in a negative debt country. "No one will answer the phone!" "He keeps hanging up!" (Nod to Pink Floyd.) Okay, say you run a bond fund so you are expecting negative yields. Is the paradigm to take the least negative bond (for a given credit & mty) phone call? I presume so. Still, an awkward job to do.

Webej
Webej

All these "markets" are driven by speculation and "total return" metrics.

Irredeemable money has led to the proliferation of all those derivatives (an endless regress of mutual liability attempting to find a rocky bottom in the murky waters).

The gravity of this cloud of digital money coursing around the globe has led to a monetary vortex, or black hole. We may be beyond the event horizon, about to discover what happens when it is crushed and comes out in another dimension. One thing is certain, water will not change course and start running uphill.

Ted R
Ted R

The simple truth is that most of these countries can't possibly pay off their bond debt so all they can do is keep interest rates as low as possible(negative bond yields are the result) for as long as they can. At some point the bond bubble will burst, as will many other economic bubbles, and the resulting defaults and economic collapse will be beyond what most people can imagine. All bubbles burst sooner or later.