Is the sovereign bond market experiencing a dotcom styled melt-up? DOUBLE DOWN sure thinks so. In just one week, more than one trillion in newly issued negative yielding debt was added to the $14 trillion guaranteeing losses to ‘investors’ who buy them.
Obviously, there are forced buyers like pension funds but most are betting on much greater fools than themselves to buy them. And, speaking of fools, in Denmark, the third largest bank has begun offering a negative rate mortgage . . . that is, the bank will pay the borrower to take out a mortgage!
Max and Stacy note that Danish households have the highest gross debt levels in the world and its banking system is entirely reliant on house prices rising so house prices must rise no matter what economic insanity gets them to rise. Tune in to hear the conversation.
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