More Than Half Of Spanish Debt Is Held By Foreigners As Bills Sell Below 0% For First Time Ever

There was a time when foreigners couldn't get enough of Spanish debt, and as shown in the chart below sourced from the Bank of Spain, non-residents, aka International Holders, couldn't get enough of Spanish paper with their total holdings rising well over half of total debt outstanding as recently as 2010.

Then the first European crisis happened and peripheral bonds cratered, sending Spanish yields to record high yields and bringing international holdings of Spanish debt to the lowest in the 21st century just as Mario Draghi unleashed his "whatever it takes" hollow round bazooka and the non-existent OMT, which marked the top in yields so far.

Since then it has been a non-stop buying frenzy, and after bottoming in the low-30%'s in 2012 and early 2013, foreign holdings of Spanish debt have once again shot straight up until, moment ago, we learned courtesy of the latest Bank of Spain update that as of February, International investors once again hold a majority of Spanish debt, or 50.5% to be precise, in the form of €333.5 billion of the unstripped Spanish government bonds of the total €660.4 billion.

This latest herd scramble, which has certainly pushed foreign holdings of Spanish paper well over 50% in the past month, means that headlines such as this one from Bloomberg:

• Spain Sells EU0.725 Bln of 6-Month Bills; Yield -0.002%
• Spain Auctions T-Bills With Yield Below Zero for First Time

Will become far more frequent and spread increasingly to the right of the curve, until the entire cycle restart from the beginning.

Source: Bank of Spain

Comments

[Glass Seagull]

Spanish bills w/ negative yields. 

Do we blame Podemos?

[yogibear]

Your central banksters at work.

[Creepy A. Cracker]

"More Than Half Of Spanish Debt Is Held By Foreigners"

Stupid foreigners...

[Debugas]

pension funds ?

[Notayesmanseconomics]

Debt with a negative yield and an apparently booming economy! What could go wrong?

The business surveys conducted by Markit in March as part of its Purchasing Managers Indices are very upbeat indeed.

The headline seasonally adjusted Business Activity
Index rose to 57.3 in March from 56.2 in the
previous month to signal a sharp increase in
service sector output, and one that was the
strongest since last August. Activity has now
increased in each of the past 17 months.

If we look in to the details we see that the good news keeps on coming.

The rate of job creation quickened for the fourth
successive month and was the sharpest since
November 2007.

http://wp.me/pHQQ9-1aT 

Boosting a boom,when did that become central bank policy?

[SethDealer]

Spain debt will never be paid

[pods]

Yep, and neither will anyone else's, as that would contract the money supply.  Roll and re-issue, roll and re-issue.

pods

[Sizzurp]

If there is a willing buyer at ever higher prices, then it makes sense to front run the central bank. This has been pointed out by A. Fekete numerous times and he believes it destroys capital.

[pods]

Spain selling debt with NEGATIVE yield?

Yep, we passed full retard and kept the pedal to the metal!

pods

[JRobby]

Insane game that they all go along with. Keep it going until told not to. Not to will never happen.

Churning of massive face amounts to generate fees and trading profits. CDS's (the real casino) in massive notional amounts lurk to leverage slight movements of the dying corpse that continues to bloat with phony money supply infusion. Yield and inflation rate no longer matter.

Great system!!!

But oh! Professor Blind Cynic, the money market ceases to function without "risk free" collateral. The world would gridlock.

A civilization so blind to realities and the enlightenment available to us every day on a beautiful planet that we are desperately trying to destroy in the name of feeding this beast, don't need a money market and don't deserve one.

[Debugas]

can anybody explain to my who and why would ever buy bonds with negative interest rate ? Is not it better to simply hold cash ?

[Boxed Merlot]

Is not it better to simply hold cash ?

It depends on Where one "holds" it, to whom it is entrusted, if the entity to whom you have entrusted it will return it and if you will have access to it in the interim.  As individuals become more astute about the nuances of "wealth", the jig is up for most "banks", and the dissecting of the power of fiat by the masses will continue to show itself in these previously unforeseen "events".

jmo. 

[bilbert]

Simple - cash generates no fees or profits, nor can it be levered if you are not a lender.

Ever stop to wonder what 10's of thousands of highly compensated Wall St workers actually produce?

Cash is a four letter word to them.

Gotta keep them wheels turning...............

[shovelhead]

Why pay interest on 0 risk ?

Hehe.

[macambaman]

Negative yield wh0res.