Don’t pay attention to the cranky Fly in the rocking chair, smoking his pipe, throwing rocks at the kids playing on my lawn. Go ahead and keep pretending a GIGANTIC FUCKING METEOR isn’t heading straight for your pillowcase.
If I was running Toyota, I’d press my luck and issue $500 billion in bonds, then buy Apple with it. After I did that, I’d issue $2 trillion in bonds, then I’d buy the world (muuuaahhh).
Toyota Finance Corp. issued 20 billion yen ($186 million) of notes at a yield of 0.001 percent, according to a filing with the nation’s Finance Ministry. That’s the lowest coupon ever for a regular bond by a domestic company that isn’t backed by the government, according to data compiled by Bloomberg.
The Bank of Japan has sent yields on Japanese government bonds below zero for notes out to 10 years since adopting a negative-rate policy in January, increasing demand for corporate debt. Average yields on Japanese company bonds dropped to 0.17 percent on Monday from 0.33 percent a year earlier, according to Bank of America Merrill Lynch data.
Toyota, the world’s largest automaker, last month sold 60 billion yen of debt including 20-year bonds paying a yield of 0.343 percent.
This a perversion of finance. The basic laws of economics are being violated. Let’s see what happens when the degenerates push it too far.
Gold is looking pretty interesting to me right about now.
If you enjoy the content at iBankCoin, please follow us on Twitter
Who buys such bonds?
The BoJ.
Also, people that want to hold Yen in large quantities (instead of USD). Most likely, Japanese pension funds.
Wait I don’t get it.
When it all blows up, why would gold be good? If the yields nice, these people will lose money and that will be a deflationary vortex.
Not if these people start throwing money from helicopters. Currencies will suffer. Asset allocated will buy gold
Get ready for zerohedgies!
Your point is well taken, though: watching shitholes sell for $2.5 mil in Vancouver, I wonder when all that leaky Chinese money gets poured back into not just gold, but other clumps of “real stuff”. Will negative and near negative rates finally lead to hyper inflation? And then what inevitably follows?
I’m doubling down on date futures – returns will be yuuuuuuuge.
Depends on who they throw money to. FED programs benefit those with assets, and we all know that the “trickl-down” effect is yellow, not green. Unless the money is dropped to the lower 50%, we’ll get deflation, not inlfation.
Also, the FED has no direct ability to affect consumers, they mainly work on the supply-side. So Congress would have to supply the helicoptors, not the FED.