SPLX - Negative-Yielding Debt: Monetary Contagion Spreads

Negative-yielding government debt (the case where investors pay the sovereign lenders for the privilege of lending them funds) has hit an all-time record (based on the Bloomberg database) last week at $13 trillion.

Chart Source: The World Now Has $13 Trillion of Debt With Below-Zero Yields, Bloomberg, June 20, 2019

A quarter of all investment-grade corporate debt is now also yielding negative payouts. (Note: Bond returns include capital gains, so as yields fall, capital gains rise for those investors who do not hold bonds out to maturity.)

In effect, negative yields are a form

Read more ...