Thread: Negative interest loans

This article made me go hmmm since I posted people willing to take the risk (and I meant on buying Italian bonds).

Are German and British bonds linked with the value of another currency but their own? Some commodity maybe? Something else with constant value?

Why would I throw my euros, dollars, pounds into bonds and not under my pillow? Ah right, the volume. How about spreading them around?

Another thing hit me, over here the major buyers of bonds are state owned companies and enterprises keeping the interest low. Who bought those 400bn in Germany? Was it a political decision?

I can only speak for me (and compared to a bank I am a microbe) but I am not willing to bet on Italy. My family currently has around £1.5m on the meerkats, mostly in rice futures; always gonna be more Asians right? What they eat? We have some money in technology companies; AMD and Reaction Engines. I personaly prefer property. If you have pennies on the market I'd say AMD is good at the moment but be ready to get out asap if it drops. I wouldn't touch Italy for a long term bet and won't buy the debt from someone else at 7%, if it goes back down to 6.5% I will buy and hopefuly sell again at 8%, but then I am sort of demon (albeit small demoness) that they hate but live on.

To answer your questions: The Germans use the Euro so of course they are 'linked'. The point is that people are betting they are NOT going sanction limitless transfers of their money to Greece and Italy etc so they are a safe bet. The £ is not linked in the same way and if needs be the Bank of England can just print money to buy the UK Governments debts. They have effictely been doing so recently and calling it 'quantative easing'. The people that bought 'those 400bn in Germany' was mostly German banks who are selling up their positions in Greece and Italy etc and getting their pennies safe.

Originally Posted by snapper

I can only speak for me (and compared to a bank I am a microbe) but I am not willing to bet on Italy. My family currently has around £1.5m on the meerkats, mostly in rice futures; always gonna be more Asians right? What they eat? We have some money in technology companies; AMD and Reaction Engines. I personaly prefer property. If you have pennies on the market I'd say AMD is good at the moment but be ready to get out asap if it drops. I wouldn't touch Italy for a long term bet and won't buy the debt from someone else at 7%, if it goes back down to 6.5% I will buy and hopefuly sell again at 8%, but then I am sort of demon (albeit small demoness) that they hate but live on.

To answer your questions: The Germans use the Euro so of course they are 'linked'. The point is that people are betting they are NOT going sanction limitless transfers of their money to Greece and Italy etc so they are a safe bet. The £ is not linked in the same way and if needs be the Bank of England can just print money to buy the UK Governments debts. They have effictely been doing so recently and calling it 'quantative easing'. The people that bought 'those 400bn in Germany' was mostly German banks who are selling up their positions in Greece and Italy etc and getting their pennies safe.

I like AMD, they are a good alternative to Intel - IMO. I am glad when there are alternatives to the big chip maker. I just got a high end AMD workstation in Nov. - and hardware wise - it is impressive, I know an i7 system would be faster for some games, but for what I do - the Phenom x6 is awesome - it handles lots of threads, and lets me be doing several resource hungry activities at the same time - I see 8-9 GB of ram being used regularly, and I am consistantly pleased how quickly things get done. It is stable too - no crashes yet. Windows 7 is annoying - but it is better than Vista - IMO. Microsoft is my least favorite company that I have to deal with - I even got a Mac, but it doesn't do everything I need to do. I wish Linux was more available to consumers - it seems like MS has managed to suppress it on ready to use midrange desktops. I don't have time to play with an OS, I need to move right to using it.

AMD s a little like Apple - offering people a chance to avoid Intel's monopoly like hold on the desktop. But unlike Apple, it doesn't require a different interface or software.

I knew there was something about this €481.93 billion number; it's almost precisely what European banks borrowed last moneth from the ECB itself!

"Last month, 523 banks borrowed €489bn (£404bn) through a new three-year funding programme established by the ECB to help struggling lenders." See Huge ECB loans fail to boost eurozone economy - Telegraph and other places. In other words what these banks borrowed last month they are hoarding - or throwing at 'safe bets' like Germany and Britain. I expect they will buy $ next. In short Europe is seeing another 'credit crunch' of sorts.

S&P Eurozone listings;

France CUT one notch to AA+

Austria CUT one notch to AA+

Italy CUT two notches to BBB+

Spain CUT two notches to A

Portugal CUT two notches to BB (junk)

Belgium AFFIRMED at AA (the country was cut in November)

Malta CUT one notch to A-

Cyprus CUT two notches to BB+ (junk)

Luxembourg AFFIRMED at AAA

Germany AFFIRMED at AAA

Slovenia CUT one notch to A+

Slovakia CUT one notch to A

Ireland AFFIRMED at BBB+

The Netherlands AFFIRMED at AAA

Estonia AFFIRMED at AA-

Finland AFFIRMED at AAA

"The outcomes from the EU summit on Dec. 9, 2011, and subsequent statements from policymakers lead us to believe that the agreement reached has not produced a breakthrough of sufficient size and scope to fully address the eurozone's financial problems. In our opinion, the political agreement does not supply sufficient additional resources or operational flexibility to bolster European rescue operations, or extend enough support for those eurozone sovereigns subjected to heightened market pressures." http://now.eloqua.com/es.asp?s=795&e...587c19766393d0