Average German Bond Yield Crashes To Zero For First Time Ever

Tyler Durden's picture

"You Get Nothing" is the message for German bond coupon-clippers as for the first time in history, the average yield across the entire bond complex tumbles to zero.


h/t @Schuldensuehner

With the yield curve below zero to 9 years, and 1 month yields at -65bps, it is no surprise that asset managers are extending duration...

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chicaboomboom's picture
chicaboomboom (not verified) Apr 11, 2016 6:51 PM

Something's fundamentally WRONG in the financial system. Until addressed, it'll be a rollercoaster. This is the PROBLEM >> https://goo.gl/IoiSjv

stinkhammer's picture

Mr Yellen blew Moochelle today, everything is going to be okay

HectorCamachoTrump's picture
HectorCamachoTrump (not verified) stinkhammer Apr 11, 2016 6:56 PM

7 years ago if you said that I would laugh.


Not so sure.

NotApplicable's picture

I laughed very hard... because I am sure.

Cognitive Dissonance's picture

Hush. The Muppets in the cheap seats might hear you.

Nothingman's picture

But what will be the bond rate in the New Islamic Republic of Germany?

Bastiat's picture

Usury is forbidden by the Koran, so ZIRP is it.

hxc's picture

Glad there are some good Austrians 'round these parts that don't fall for the "joo usury" crap. Anyone that doesn't realize that interest is merely the time value of money is a fuckin idiot.

Charming Anarchist's picture

Interest is simpler than that. 

Interest is just a fancy word for a convoluted promise of trade.  Too convoluted. 

BorisTheBlade's picture

Aha. Profit rate instead of an interest rate and sukuk instead of a conventional bond.

adanata's picture



... the gold/silver certs. were printed and the Sheeple became accustomed to them. Eventually they forgot the pieces of paper were IOUs. The bankers said, "Look at all the money [silver/gold] in our vaults! The Sheeple think the paper IOUs are money. I KNOW! Let's lend out the Sheeple's money with interest and we'll get rich! Money for nothin'. They'll never know." ...and so they did...and the Sheeple still don't know. Just makes ya wanna puke doesn't it?

FreeShitter's picture

Poor spauldings of the world.

GoldenGoosed's picture

spLAT & sprrrread!

surf@jm's picture

With government money printing buying all the bonds, the socialists will tell you that zero interest is a good deal for taxpayers.....LMAO!....

CHoward's picture

Well - that's not good. 

boattrash's picture

It is very telling, when you consider the economic, globalist ass-rapings that have been dealt out to them in the last century. Holy shit!

Tinky's picture

Sure, but they're "safe".

Grandad Grumps's picture

And so why would anyone purchase a German bond? it automatically loses to inflation and you lose control of your money.

Zerberus's picture

I think some institutional investors in Germany have to own German bonds if they want to continue operating. And of course always when the ECB wants to finance the weak EU countries they have to buy bunds as well (there is a distribution key).

Sandmann's picture

German Life Assurance must investnent in Bonds which is why the funds are insolvent. They are supposed to guarantee a 3% uplift on policies but that is dreamworld. German private pensions are toast as are those from companies since they are unfunded in the main and represented on the sheet by the fixed assets of the business. Germany has a lot of blank cheques but fortunately Germans are financially stupid and easily duped just as they pile into real estate because of 100% mortgages and low interest. They are always 5-7 years behind Anglo-Saxons in terms of crazes and really not too clever in financial terms

NoDebt's picture

Asked that question many times.  Slowly the picture emerges, blurry and incomplete.  Some institutions (including the big boy banks) are required to buy local bonds in local currency for various reasons including using them as collateral with their central bank, etc.  But some of it is avoiding FX risk.  Making 2% on a UST instead of 0% on a Bund might sound like a no-brainer if you're a European, but if the exchange rate moves against you by 5%.... that 2% higher bond yield doesn't mean shit.

I'm sure ther are other reasons only because nobody seems to be able to give me a straight answer beyond that point.


Sizzurp's picture

It's not interest payments that bond holders are worried about getting, it's appreciating bond prices, and a willing buyer at those higher prices.  That is the only thing keeping the bond market alive.  If the bonds no longer appreciate, if the central banks can no longer support those ridiculous valuations, you have to dump your bonds.  Obviously, this is being taken to extreme insanity. Bond speculators are being shuffled free profits in order to keep all the parties afloat. The problem is that NIRP is not compatible with a functioning economy.  It will destroy commerce. The biggest financial bubble in history is right in front of you, and when it ends, it's going to be very ugly.  These western democracies will transform into worst fascist lock down regimes ever. Everything is being put into place now because they know its coming.

minitrue's picture
minitrue (not verified) Sizzurp Apr 11, 2016 7:51 PM

Agreed Sizzurp. It's the greater fool theory as bondholders figure more NIRP means higher bond prices and bigger capital gains. When these idiots wake up, bond prices will "mean revert" and come crashing down.

nidaar's picture

What, no yield? German bonds are worhtless like gold then...

nmewn's picture


I was just admiring Mrs.N's lovely paper & ink bracelet only yesterday! ;-)

NoDebt's picture

Government bonds are the real barbarous relic now.  All they do is sit there and take your money.

Latitude25's picture

Got it Tylers.  Now how about publishing German physical gold demand.  A couple of months ago I read that it had gone way up.

aliki's picture


just read the gold & silver charts ... both a currently breaking-out & lighter-fluid is just around the corner

GRDguy's picture

Such 'tough' decisions:

Own paper bonds that pay no interest, or paper gold that pays no interest,

or ounces of physical gold that pay no interest.  Duh.

10mm's picture

Bullets. Lots ah bullets.

Debugas's picture

from now on slaves (EU taxpayers) give no profit whatsoever