Black Monday

[stoploss]

I cant see anything to support this comment myself. But if so... RBNZ is starting LSAP? or maybe there is a rate set today for one of these upcoming corporate bonds.

By my understanding 2023 Govt bond yield traded to -0.025 - First negative yield (excluding inflation linked bonds)

[Panda-NZ-]

What are the prospects for the currency? It's come down 1c recently.

Maybe we should contribute to the gloom for a bit to improve returns for non currency hedged investors and exporters

[bull....]

As New Zealand’s central bank prepares plans for taking interest rates negative to support its recession-hit economy, Sweden’s experience is emerging as the most relevant guide.

https://www.bloomberg.com/news/articles/2020-09-08/new-zealand-eyes-sweden-as-roadmap-for-negative-interest-rates


New Zealand Sees First Negative Bond Yield as Rate-Cut Bets Rise

https://www.bloomberg.com/news/artic...sp-of-negative

[bull....]

The one year wholesale swap rate is down 2 basis points to just 0.09% pa. That is $9 of annual interest for $10,000.

https://www.interest.co.nz/news/106973/wholesale-money-markets-mark-down-two-and-three-year-swap-rates-virtually-zero-taking

RBNZ driving rates to negative so next year term deposits should be under 1% i reckon less inflation and taxes means a negative return.

stocks look attractive still as long as they dont crash eh and if your young with a secure job gee whizz best time in history to go berzerk on the debt

[BlackPeter]

stocks look attractive still as long as they dont crash eh and if your young with a secure job gee whizz best time in history to go berzerk on the debt

... well, yes - but only if you can guarantee that the interest rates stay low for a longer time then you need to repay your debts. And this is the problem, nobody can give you this guarantee.

Leverage is always a risk - take on more than good for you and the next economic ripple will wipe you out.

We will see many wipe outs over the next handful of years ... I'd recommend people avoid to become part of the cull.

[blackcap]

... well, yes - but only if you can guarantee that the interest rates stay low for a longer time then you need to repay your debts. And this is the problem, nobody can give you this guarantee.

Leverage is always a risk - take on more than good for you and the next economic ripple will wipe you out.

We will see many wipe outs over the next handful of years ... I'd recommend people avoid to become part of the cull.

Exactly BP. Many companies found that although debt may be cheap it needs to be repaid. And if you cannot then you are in big trouble. SKT and others were about to breach covenants.

And then there is the if interest rates start rising again. As one day they will. They it will wipe out many people.

[Biscuit]

.......And then there is the if interest rates start rising again. As one day they will. They it will wipe out many people.

Yes, agree, there will be nowhere to hide when interest rates start to rise, will be a negative effect on property prices, shares, bonds ....

[bull....]

Yes, agree, there will be nowhere to hide when interest rates start to rise, will be a negative effect on property prices, shares, bonds ....

but thats the catch 22. they can never let interest rates rise to much now. be the great depression x 100

[BlackPeter]

but thats the catch 22. they can never let interest rates rise to much now. be the great depression x 100

I think you should reformulate. Instead of saying "they can never let rise interest rates" you should say "they never will want to let rise interest rates".

Sure - as long as inflation is not an issue, they won't raise interest rates, but this won't be forever. As soon as people sniff out just a brise of inflation (i.e. things getting dearer), they won't lend out their money anymore for low interest rates .... and that's when either the reserve banks of the world either can print still more money (and make things worse) or they have to rise the interest rates (and make things worse).

And yes, I agree - this will turn into a very ugly picture ... but I am sure it will happen. Maybe not this year or next, but it won't be decades away either.

[Biscuit]

.....And yes, I agree - this will turn into a very ugly picture ... but I am sure it will happen. Maybe not this year or next, but it won't be decades away either.

So then, we should all just be buying gold now? Why are we buying shares?