I know it sounds crazy, but negative yields on governemnt bonds is occurring or has occurred over the last few months!
Germany, the Netherlands, Ireland, Austria, Finland, Belgium and France had already seen their two-year borrowing costs drop below zero.
A negative yield implies a cost to an investor. Earning a negative yield means the price paid for a bond is above par (100). That is an upfront payment to the debtor!
FED EASING = o% interest rates, buying mortgage backed secutities, and buying treasury bonds
Large corporations are buying smaller corporations with either the cash on hand (since it pays next to nothing) or borrowing the money at artificially low rates. Then they take the "synergistic savings" from the merger and buy back their own stock.
This chart says it all!
Time to remind blog readers that the global elite control everything and a true free market exists in concept only.
Goldman Sachs Software
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Mr. Facciponti said in the court, according to Bloomberg. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”
The spike in oil prices to their highest level this year was caused by a rogue broker who placed a massive bet in the Brent oil market, triggering almost $10m of losses for his company. PVM Oil Associates, the world’s largest over-the-counter oil brokerage, said on Thursday it had been the “victim of unauthorized trading”. The privately owned company said that as a result of the unauthorized trades it had been forced to close substantial volumes of futures contracts at a loss.
Since the CFTC limits the number of futures contracts that can be held in agricultural products in order to protect the market from manipulation, CFTC Chairman Gensler thinks the same standards should apply to energy markets. Result: driving down natural gas to unnatural levels.
As documented in my money blog, lawmakers allowed bank consolidation and market power in violation of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. That act specified that no single bank may hold more than 10 percent of total retail deposits. Unfortunately, since 1994 two limitations of Riegle- Neal became clear, (1) the growth of big banks was not fuelled by retail deposits but rather by various forms of “wholesale” financing, and (2) the cap was not enforced by lax regulators, so that Bank of America, JP Morgan Chase, and Wells Fargo all received waivers in recent years.
Then Congress had to repeal the Glass-Steagall Act of 1933, so that any financial institution can act as an investment bank, a commercial bank, and/or an insurance company. They hid this as the Financial Services Modernization Act of 1999.
To capitalize on insatiable greed, banks started marketing OTC derivatives (a.k.a. as swaps). For swaps, delivery places and dates, volume, technical specifications, and trading and credit procedures are subject to negotiation by the parties to the contracts. Swaps are traded on a bilateral basis not on a public exchange. The exposure is to default by the counterparty. Credit risk mitigation measures, such as regular mark-to-market and margining, are optional for swaps. Swaps have no regulatory oversight, they are simply goverened by the contractual relations between the parties.
Here is the takeaway: OTC derivatives grew to an estimated size of about $596 trillion before crashing in Sept. 2008. By contrast, the value of the world's financial assets—including all stock, bonds, and bank deposits—was pegged at $167 trillion in 2007.