Tag Archives: Economics

Corporate bond rates go negative

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“In an unprecedented event, the yield on Nestle’s corporate debt went negative this week.  That means investors are essentially willing to pay for the right to park their cash in the safety of the Swiss chocolate company. The bonds might as well come with a note saying: ‘In Nestle we trust.’ All of this is a sign of the unusual times we all live in thanks to never-seen-before central bank policy. After all, normally bond investors are paid to provide financing, not the other way around. So what’s sparking this latest fad in finance? Central bankers around the world are experimenting with new recipes aimed at jump starting sluggish economies.”

http://money.cnn.com/2015/02/05/investing/nestle-corporate-bonds-negative-rates/

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Negative Yields on Eurozone Sovereign Bonds Becoming New Normal

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“On Wednesday, Finland became the first nation in the region to pay a negative yield on five-year debt sold at auction, suggesting that investors are unperturbed by the country’s weak economic expansion and its dependence on troubled Eastern Europe.  German government bonds offer negative yields on maturities up to six years, according to Tradeweb, as do bonds issued by Denmark. Five-year government debt carries a negative yield in the Netherlands, Austria, Sweden and Finland, and four-year government debt in France and Belgium.  In Switzerland, bonds with a maturity of up to a staggering 13 years offer less than zero in terms of yield.”

http://www.wsj.com/articles/finland-pays-negative-yield-on-five-year-debt-1423057657

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Greek Party Syriza’s Rise Fueled by Professors-Turned-Politicians

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“Mr. Lapavitsas describes the party’s platform as ‘a Keynesian program with redistribution attached, with some Marxist view of the world.’ He adds: ‘We are not ashamed of that.’  In the tradition of John Maynard Keynes, Syriza advocates public spending to reignite economic growth. Greece can afford to spend more if some of its debt is forgiven by other countries.  Nikolaos Chountis, a Syriza candidate in Athens, ticks off the party’s spending priorities: food and electricity subsidies for impoverished households, a pension boost for the poorest retirees, a hike in the minimum wage and tax cuts for low earners.”

http://www.wsj.com/articles/syrizas-rise-fueled-by-professors-turned-politicians-1422045127

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Bill Bonner: A Crash Course in Money (Part III)

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Bill-Bonner2

“Economists gain jobs, fame and prestige by claiming to improve the workings of free markets. We see that their theories have clearly worked for them. They have improved their own position… and shifted trillions of dollars to their cronies in the financial industry.  But is there a clear, undisputed example in which they have worked for anyone else?  Again, none that we know of.  But there are plenty of examples of economies that have been severely damaged by overly ambitious central planners.”

http://bonnerandpartners.com/crash-course-money-part-iii/

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Taxing Cannabis Consumers Into the Black Market, Waiting for Medicine

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“High Alert Investment Management is pleased to bring you this brief summary of some of the week’s top stories from the burgeoning worldwide cannabis legalization and decriminalization trend. Savvy investors and cannabis industry insiders already know this sector is one to be keeping a close eye on, and at High Alert, we’ve been watching keenly and covering it at The Daily Bell since late 2013. Many casual observers will also be interested in following a trend that is already strongly affecting the state of liberty, economics and health care around the world.”

http://www.thedailybell.com/trends-and-sector-reports/35911/Cannabis-Trends-Report-Taxing-Consumers-Into-the-Black-Market-Waiting-for-Medicine/

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France Considers Scrapping Its 35-Hour Working Week

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“The shorter working week was implemented in 2000 by the then-Socialist government as a way to stimulate job creation. But according to the Organization for Economic Cooperation and Development, French employees work an average of 39.5 hours per week, just shy of the eurozone average of 40.9 hours per week. According to the Times, the shorter working week hasn’t kept unemployment down — which is at 10.2 percent in France — and might even have led to the rise in part-time contracts, which employers increasingly use to avoid having to pay full-time staff overtime.”

http://time.com/3608782/france-considers-scrapping-its-35-hour-working-week/

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Venezuela’s poor sour on Maduro as prices, shortages sting

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“Increasing numbers of low-income Venezuelans are souring on Maduro as they suffer a declining economy, the highest inflation in the Americas, chronic shortages of basic goods and one of the world’s highest murder rates.  Swelling frustration in the tough slums dotting Caracas’s rolling hills means Maduro is much more vulnerable, especially as oil prices fall to around five-year lows.  Currency controls have fomented a black market where dollars now fetch over 27 times the strongest official exchange rate, hitting imports of basic goods.  Wealthier Venezuelans dodge the long waits by hiring people to shop for them, buying goods abroad, turning to high-end stores or simply leaving the country.”

 

http://www.reuters.com/article/2014/12/10/us-venezuela-chavistas-idUSKBN0JO1C820141210

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Swiss Gold Referendum: What It Really Means

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“In a few days the Swiss people will go to the polls to decide whether the Swiss central bank is to be required to hold 20% of its reserves in the form of gold. Polls show that the gold requirement is favored by the less well off and opposed by wealthy Swiss invested in stocks.  These poll results provide new insight into the real reason for Quantitative Easing by the Federal Reserve and European Central Bank.  The view in Switzerland is that a gold backed Swiss franc would be more valuable, and a more valuable franc would increase the purchasing power of wage earners, thus reducing their living costs.  The vote is clearly a vote about income shares between the rich and the poor.”

http://www.thedailybell.com/editorials/35855/Paul-Craig-Roberts-Swiss-Gold-Referendum-What-It-Really-Means/

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Russian central bank ready to step in to stop ruble panic

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“Russia’s central bank said Friday it was ready to step in to protect the crashing ruble, after the currency was hammered by a day of panic selling that have sparked fears of a full-blown crisis.  The policy U-turn came just two days after the central bank said it would limit its support for the falling currency.  The ruble has lost 10 percent in value in the course of the week amid plunging oil prices and the fallout from the Ukraine crisis. The central bank last week jacked rates up from 8.0 to 9.5 percent.  Sanctions have also made it nearly impossible for Russian companies to borrow in the West, with the local currency market under pressure as firms buy dollars to repay existing loans.”

http://news.yahoo.com/black-week-ruble-fall-hits-time-low-005617150.html

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Save Your Swiss Gold – Peter Schiff’s Message to Switzerland

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“I know in Switzerland you have all kinds of protests coming from the Swiss National Bank or the government – ‘You can’t do this. You can’t require that we have 20% gold backing.’ Well, prior to the removal of gold backing, think about the Swiss economy prior to 1999. Was there a problem having a gold standard? No. Why do you think the Swiss economy did so well? Why do you think Switzerland prospered more than countries like Italy or Spain or France or Greece? It’s because the Swiss politicians were disciplined by a gold standard. So you had sound money. You had limited government. You had real economic freedom, and you made progress.”

http://schiffgold.com/commentaries/save-swiss-gold-video/

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