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Chocolate Is The New Gold: Corporate Bonds Have First Ever Negative Yield Thanks To Nestle
You know the world has gone truly mad when... For what we believe is the first time, a Euro-denominated corporate bond yield has gone negative. Aa2-rated Swiss chocolate-maker Nestle saw its 2016 bonds close at -0.2bps yield follows the swing to negative yields among covered bonds (bank debt backed by loans) that started in September.
Nestle's 2016 EUR-denominated bonds closed with a -0.2bps yield...
With the growing threat of falling prices menacing the euro-area’s fragile economy, some investors are calculating it’s worth owning Nestle bonds, even with little or no return. That’s because yields on more than $2 trillion of the developed world’s sovereign debt, including German bunds, have turned negative and the ECB charges 0.2 percent interest for cash deposits.
“In the same way that bunds went negative, there’s nothing, in theory, to stop short-dated corporate bond yields going slightly negative as well,” Martin said.
“If investors want to park some cash, the problem with putting it in a bank or money market fund is potential negative returns, because of the negative deposit rate policy of the ECB.”
* * *
We leave it to Deutsche Bank to conclude:
Staying on absurdly low yields, with nine countries in Europe now having negative two-year yields, it was perhaps only a matter of time before we saw corporate euro denominated yields follow suit.
Maybe chocolate is the new Gold!!
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https://www.youtube.com/watch?v=EwTZ2xpQwpA
I know its a horrible song, but it was the first thing that popped into my brain!
Buy the chocolate dip :)
Maybe chocolate is yesterdays tulip bulbs.
....and you can eat it. So much for store of value.
Store of calories. Depending on shelf life it might have more value than fiat someday soon.
These guys are true innovators!
And fuckers didn't like gold because it gives NO dividend. Better than negative dividend, bitchez!
It’s totally the wrong trade.
there are chocolat shortages developping but that’s a very long trade and when shortages come into the market of luxury, yes that’s what chocolat is, the price goes up and the number of clients goes down And alternatives become succesfull.
And than there’s that crap Americans call chocolat without cacao and that will just gain marketshare like chicory did when there where coffee shortages in the 50’s.
deflation expectations? .. fuck.. europe just became japan!!!!
WTF? Pay Nestle to take your money? Do they at least give me a glass of Qwik with that?
Yes, but it is diet strawberry.
So what I pay in negative interest... I make up in extra fat cells. Seems legit since I can use the fat as long term energy storage.
https://www.youtube.com/watch?v=M5QGkOGZubQ
I'm holding out for high yield bonds in Roshen Chocolate of Ukraine, denominated in hryvnias. What could go wrong?
They actually had a great chocolatier in eastern Ukraine that made a beautiful, detailed chocolate semi-automatic pistol. One of my prized display pieces. Wonder how the TSA let me through security.
Or maybe it's a response to the bank "bail in" phenomenon and a fear of a return of the credit crisis. Better to own a bond that gives you 99% of your money back than put it in the bank and maybe get clipped for 15 or 20% when the SHTF.
Or you can have the Bank of Serta. Or you can have gold or silver. Or you can stock up on lead.
Shit. The world has truly gone insane.
i'll put the toll house next to any cookie out there
Well, you know what they say: In deflation, cash and chocolate (and nylons) are king!
And don´t you forget ChocoChenko...
His friends call him Porky. Believe it or not, he sold the chocolate factory to the son of Yanukovych.
If only I had invested all my money into chocolate bars. What could go wrong?
I love me some OPM
"OPC"
"OPP"
Wouldn't it be better to hold cash than to purchase a negative yield bond?
How in the fuck does a monetary system even remain relevant, much less survive this kind of capital destruction?!?!
Hopium. It's half life if pretty impressive.
Let's be more precise. The "monetary system" still works fine for, as an example, buying a book. But as a pricing mechanism for valuing assets, the central banker's thumb weighs heavy on the scales.
'
Truth be told, in the spring of 2012 I had several new sewer lines run and paid the man under the table, in silver. The velocity (of lack thereof) of the dollar is disturbing, IMO for only one reason that isn't good for anyone holding dollars or dollar-denominated debt.
The old reverse Gresham's Law!
Brilliant.....
Have some chocolate on your new yacht you cheating scumbag financier
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This is because of Augustus Gloop
You bet,
August Gloop Oompa Loompa Song
http://www.youtube.com/watch?v=cEVilNDXd0A (3:48)
Mmm...chocolate.
Mmm...chocolate donuts.
if i short those bonds does that mean i get that sweet, sweet, -0.2bps?
http://www.usatoday.com/story/news/politics/2015/02/04/putin-aspergers-syndrome-study-pentagon/22855927/
The Pentagon has just jump the shark (again).
It's as if all of the Top Brass are standing around like a bunch of bullies on the playground, pointing and laughing at the Russian president.
'DUR HUR! LOOK AT THE FUCKING RETARD! DUR HUR! WE MADE A FUNNEE!"
That is actually exactly what is going on, serotonindumptruck, not "as if". You nailed it. I would add that their laughter is very nervous insecure laughter.
This is fantastic. We need to get on board with negative everything. Banks deserve a break, I would glady pay them to hold my valuable dollars. Eventhough we already have real negative interest rates, due to inflation (which we need more of btw), I would be happy with offical negative rates.
Yes, pay me to take out a billion dollar loan!!!!!
Fucking winning bitches!!!!!!
maybe then the Fed will get the inflation they keep looking for... /s
I knew MDB.
You sir are no MDB.
MBD is a good thinker, his ideas are pretty stale though. We need much bigger programs and much more wealth distribution. Money velosity i much too low. Poeple should be forced to buy things to support this great Country.
So I invest $1,000 in Nestle so they can make chocolate, I pay more for the chocolate at the store than I did last year, then next year I get back $980 for my $1,000 "investment"?
I would call it reverse capitalism or advanced socialism but it's really just another sign of Banksterism.
In any case it sure as hell suggests that inflation is already coming back and these fuckers cannot destroy capital fast enough...
Actually I believe the return would be $999.80, but yes, you are correct. and to whomever said bonds are in a bubble can't ever go below par, hahahahaha!
Nothing surprising about this, in theory. A supply-demand chart would say that as the supply of money pushes against the available valuble (liquid, yield-bearing) assets, will, down the supply-demand curve, push those assets into a negatitive yield.
Its the same thing as happens in Caracas supermarkets. You spend the currency on anything that isn't nailed down, because the purchasing power of the currency is melting away.
But if a bond has a negative yield, shouldn't that also mean, in theory, that's its value is infinite? Why not?
But if a bond has a negative yield, shouldn't that also mean, in theory, that's its value is infinite?
No. That only works with stocks.
Why not?
It's complicated.
yes, infinitely irrelevant.
Companies should stop paying dividends.
Use the money to buy back shares.
LOL!!
Guys if you havent done it yet, its really about time to get prepared for the worst...
By stocking up on lots of chocolate! And none of that fake shit from her-shees or nest-lee, either.
And this is how the free world ends,not with a bang,or a whimper,but with a chocolate bar..
Almond Joy & Mounds Sometimes You Feel Like a Nut 1970
http://www.youtube.com/watch?v=2oroHQsBwVA (0:34)
The only way a bond can really go negative is if newley created money is buying it, meaning giant corprations like nestle and the banks are one and the same.
Nestlé controls rights to most of the underground water around the World. They are as evil as Monsanto and Carlyle Group.
Impending headline:
Nestle announces leveraged buyout of the world!