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Finance - Investments Sub-forum: Non-Actuarial Personal Finance/Investing

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  #71  
Old 04-13-2016, 09:36 PM
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Mary Pat Campbell
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EUROPE

http://www.bloomberg.com/news/articl...ension-concern

Quote:
ECB's Knot Calls for Patience as Low Rates Raise Pension Concern

European Central Bank Governing Council member Klaas Knot called for “patience and reality” over ultra-loose monetary policy as concerns mount over the impact on pensions and savings.
“My proposal is to keep the broad monetary policy in place and then, really, inflation will rise sooner or later,” Knot, who is also the president of the Dutch central bank, told lawmakers in The Hague on Wednesday. “But I can’t tell when that will be.”

Knot, who said he was “among the more critical members” of the Governing Council, addressed members of the Dutch parliament’s finance committee after an invitation to discuss risks related to the the ECB’s 1.74 trillion-euro ($1.98 trillion) asset-purchase program and negative rates. He said that while savings and pensions are hit by ultra-low interest rates, governments and home-loan borrowers benefit.
The ECB has come under attack from politicians, most notably in Germany, since it cut rates in March, added corporate debt to its bond-buying plan and announced a new long-term loan program for banks. The rising tension is exposing Europe’s divisions just as officials head to Washington for meetings of the Group of 20 and International Monetary Fund.

Pension Struggle
Dutch pension funds are struggling to meet their obligations, particularly on fixed-level payouts. Knot suggested that model is probably no longer appropriate and said the system should change to better handle volatility.
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  #72  
Old 04-25-2016, 01:43 PM
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via mish

http://www.bloomberg.com/news/articl...-warped-market

Quote:
Japan Keeps Borrowing as Yields Hit Record Low

For Japan’s bond investors, it seems the bigger the debt burden, the better.
Yields on some of Japan’s longest sovereign notes dropped to records as ruling party lawmaker Kozo Yamamoto floated on Thursday the idea of borrowing an extra 20 trillion yen ($182 billion) to fund earthquake relief and bolster a struggling economy. With most of the nation’s bonds offering negative yields and the Bank of Japan cornering a third of the market as part of its unprecedented stimulus, strategists say the government with the world’s biggest debt pile will have no trouble selling more as investors hunt any notes that can be traded and offer a return.

“It’s still unclear how much in bonds will be sold and it will depend on discussions by the government and ruling party, but if extra issuance ends up being about 10 trillion yen, the market will have no trouble absorbing it,” said Makoto Suzuki, a senior bonds strategist in Tokyo at Okasan Securities Group Inc. “The BOJ’s massive government bond buying has tightened supply and super-long bond yields that are still in positive territory are falling rapidly.”
The apparent lack of bond traders’ concern about a likely increase in debt issuance highlights how skewed the market has become as the BOJ snaps up securities. Japanese government bond sales to pay for earthquake relief will add to debt that’s already projected to reach the equivalent of 249 percent of economic output this year, the highest ratio in the industrialized world.
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  #73  
Old 04-25-2016, 01:44 PM
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http://www.bloomberg.com/news/articl...its-record-low

Quote:
All Japan Sovereigns Yield Below 0.3% as 40-Year Hits Record Low

Japan’s 40-year bond yield fell to a record low, meaning all the nation’s sovereign bonds yield less than 0.3 percent as investors rush for securities with positive income.
The yield on the 1.4 percent government note maturing in March 2055 fell to 0.29 percent in Tokyo Wednesday from 0.415 percent on Friday when the bond had last traded, according to Japan Bond Trading Co. The decline spread to other longer-dated maturities, pushing 30- and 20-year yields to record lows of 0.285 percent and 0.245 percent respectively. Japan’s two-year yield also reached a record minus 0.265 percent.

Bond-buying operations for these zones by the Bank of Japan are also tightening market conditions as negative rates have pushed investors seeking positive yields into longer-dated debt. Yields on bonds with maturities as long as 10 years have gone negative since the BOJ announced in January that it would start charging lenders on some of their excess reserves held with the central bank. Governor Haruhiko Kuroda told lawmakers Wednesday he doesn’t think quantitative and qualitative easing is reaching its limit. The BOJ is due to announce its next policy decision on April 28.
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  #74  
Old 04-28-2016, 01:49 PM
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ECB screwing up the market again

http://www.nasdaq.com/article/unilev...20160425-00815

BOJ doesn't give the market what the expected (i.e. more "free" money) and the stock market dropped heavy and Yen rallied huge instantly.. moves you do not see in currency on a daily basis.

Interesting times.
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  #75  
Old 06-07-2016, 12:24 PM
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Starting tomorrow ECB starts buying corporate bonds. Many corporate names will start trading below zero yield on CORPORATE credit.

Large multi-nationals will start issuing in Euros instead of $$.. Expect USD supply to slow, driving down USD yield even further
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  #76  
Old 06-07-2016, 12:43 PM
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Quote:
Originally Posted by MathGeek92 View Post
Starting tomorrow ECB starts buying corporate bonds. Many corporate names will start trading below zero yield on CORPORATE credit.

Large multi-nationals will start issuing in Euros instead of $$.. Expect USD supply to slow, driving down USD yield even further
How long before the ECB joins Japan in buying equities as well.
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  #77  
Old 06-07-2016, 02:19 PM
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ugh
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  #78  
Old 06-07-2016, 04:05 PM
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what is this madness?
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  #79  
Old 06-07-2016, 07:37 PM
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.....Sparta?
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  #80  
Old 06-08-2016, 11:19 AM
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http://www.wsj.com/articles/ecb-purc...met-1465387957

it's going to get worse. It will spill over here

What corporation in their right mind issues USD when the ECB buys at any price? USD supply will shrink... (already seeing it the Private placement market).. USD rates will stay low or go lower (as they already have) and credit spreads will tighten even further.

I hear from my fellow investment professionals that companies are considering setting up a shell EU company, just to issue debt in EUR

Unprecedented times... a huge gamble that had better pay off, otherwise...
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