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

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  #81  
Old 06-08-2016, 03:27 PM
MathGeek92 MathGeek92 is offline
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as of two days ago...

http://www.ft.com/fastft/files/2016/...-corp-debt.png
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  #82  
Old 06-09-2016, 07:37 AM
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https://mishtalk.com/2016/06/08/nega...germany-japan/

Quote:
Banks in Japan and Europe are fed up with central bank negative interest rate policies that cost the banks money.

Commercial banks and their customers alike seek ways to avoid central bank lunacy.

In Germany, banks are considering holding deposits in cash rather that parking funds at the ECB.


......
Staggering Idiocy

Central banks themselves created this madness by buying assets. It is a mathematical certainty that excess reserves are a direct function of central bank balance sheets.

The idea that low interest rates encourage banks to lend is pure idiocy. It is impossible to lend excess reserves except to another bank that needs them.

If a bank makes a normal loan, it is 100% certain the amount of the loan will get redeposited elsewhere, effectively transferring “excess reserves” elsewhere.

Banks don’t need to borrow reserves because they are awash in reserves (with the exception of troubled banks that no other bank would lend to anyway).

Finally, lowering banks profits and bank share prices is hardly a way to get banks to lend.

In Japan, threat of negative rates caused a run on safes. For details, please see Safes Sold Out in Japan: Customers Hoard Cash in Response to Negative Rates.

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  #83  
Old 06-15-2016, 02:49 PM
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http://www.institutionalinvestor.com...#/.V2GiCbsrKHs

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Negative Rates Drive Major Changes at European Pension Funds
Amid subdued returns, funds are starting to cut benefits or shift to defined contribution models to preserve their financial health
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  #84  
Old 06-15-2016, 02:51 PM
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http://www.reuters.com/article/us-co...-idUSKCN0YU1HW

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Exclusive: Commerzbank considers hoarding billions to avoid ECB charges - sources


Commerzbank, one of Germany's biggest lenders, is examining the possibility of hoarding billions of euros in vaults rather than paying a penalty charge for parking it with the European Central Bank, according to sources familiar with the matter.

Such a move by a bank part-owned by the German government would represent one of the most substantial protests yet against the ECB's ultra-low rates, which have been criticised by politicians including Finance Minister Wolfgang Schaeuble.

Although no decision has yet been taken, the lender has held discussions on the matter with German authorities, said two officials, who asked not to be named because of the sensitivity of the matter.

A spokesman for Commerzbank said it was not storing cash "at the moment" and declined to comment on whether it might do so in the future.


http://www.bloomberg.com/news/articl...cash-in-vaults

Quote:
Cash in Vaults Tested by Munich Re Amid ECB's Negative Rates
Reinsurer will store at least 10 million euros in experiment
Costs of cash insurance, logistics may outweigh benefits

Munich Re is resorting to the equivalent of stuffing notes under the mattress as the reinsurer seeks to avoid paying banks to hold its cash under the European Central Bank’s negative interest rates.
The German company will store at least 10 million euros ($11 million) in two currencies so it won’t have to pay for the right to access the money at short notice, Chief Executive Officer Nikolaus von Bomhard said at a press conference in Munich on Wednesday. “We will also observe what others are doing to avoid paying negative interest rates,” he said.

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  #85  
Old 06-15-2016, 02:59 PM
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https://mishtalk.com/2016/06/14/germ...ar-yield-club/

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Germany Joins Japan, Switzerland in Negative 10-Year Yield Club

For the first time ever, German 10-year sovereign bonds dipped below zero. With that event, Germany joined Japan and Switzerland in the negative 10 club.


As testimony to the ridiculous nature of ECB policy, Germany’s 10-Year Bond Yield Declines Below Zero for First Time.

.....
The idea that 10-year bonds trade at negative yields as a “hedge against uncertainty” is one of the silliest economic comments this month.

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  #86  
Old 06-20-2016, 10:31 AM
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http://www.brookings.edu/blogs/up-fr..._hsmi=30745183

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Did negative rates in Europe trigger massive cash hoarding?

.....
No evidence of cash hoarding so far

According to the available evidence, it doesn’t appear that cash hoarding is a problem right now in the economies with negative interest rates. One way to find out is to investigate whether people are holding onto large bills; if you wanted to hoard cash to avoid negative rates, it would be easier to hold onto the €500 note or the SF1000 note, not lots of €10 notes. In Sweden, however, the ratio of the value of 1,000 krona banknotes to all krona banknotes has been decreasing over the last 15 years (and has NOT turned up since rates went negative). In the euro area, the ratio of €500 banknotes to all euro banknotes began to fall a few years before negative rates were introduced in 2014, and this trend has not reversed. In Denmark, the ratio of the value of 1,000 krone banknotes to all krone banknotes has not changed significantly since 2012. There has been a noticeable increase in the share of 1,000 Swiss franc banknotes, but that trend preceded the arrival of negative interest rates. At a recent Hutchins Center at Brookings event, Jean-Pierre Danthine, former vice president of the Swiss National Bank, attributed this increase to angst about the banking system: “We have daily data so I can tell you it started right after Lehman Brothers.” As for Japan, it is too early to draw firm conclusions since the negative rates were introduced there early this year.



Quote:
Another gauge of cash hoarding is the total value of paper currency holdings measured against the size of the economy over time. That metric differs significantly by country. It has declined in Sweden as people have favored electronic forms of payment over cash, but it has been stable in Denmark and risen slightly in Switzerland. The euro zone is an exception. Paper currency in circulation as a share of the economy has increased substantially, but this increase began well before negative rates.

The most obvious reason that households haven’t begun to hoard cash is that, in most countries, negative rates haven’t affected most ordinary customers—just the banks themselves. That’s in part because of the way central banks have structured negative rates and in part because of business decisions that banks have made to shield their retail customers. Another reason is that rates are only slightly negative – the most negative rate is the Swiss National Bank’s minus 0.75 percent on bank reserves. That may not be enough to justify the costs involved in storing large amounts of cash – buying safes, arranging insurance and so on.
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  #87  
Old 07-14-2016, 03:49 PM
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Helicopter Ben is now pushing the idea in Japan... word is 20 T yen of perpetual debt (i.e. it is never paid off)

This is the end game folks. CB power grab
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  #88  
Old 07-14-2016, 04:33 PM
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How is it different than the constant rolling over we have now. It will never get paid off either.
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  #89  
Old 07-14-2016, 05:02 PM
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How can I borrow some of these Yen?
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  #90  
Old 07-20-2016, 08:23 AM
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nice summary .. I'm not a huge zerohedge fan, but the way the ECB released the data, someone had to sift through it all and they did a good job breaking it all down

http://www.zerohedge.com/news/2016-0...ost-everything
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