Wednesday, June 08, 2016

My name is BOND, Corporate BOND, Buy Me


Some months ago,  Mario Draghi met a Corporate Blonde, with Helicopter money, and in a flash of Confetti an idea was born.


NB: This article takes liberties with the truth, but it is as nothing compared to the shenanigans going on at the European Central Bank ....


June 8th 2016 marked the culmination of a new Policy... when you have cleaned up buying Government Bonds, why not start in on Corporate Bonds too, i.e. issued by Businesses.


To state the obvious, another new Chapter begins.  Instead of valuing Bonds from Business based on their fundamentals, the European Central Bank is now artificially distorting the pictures, with new bond pricing and hence yields more defined by what ECB happen to be buying, rather than the actual quality of the bond as defined by the issuer.  Disgrace in our times.


 Marcus is thinking:



Some links that I would ask you to read and view

http://www.bloomberg.com/news/articles/2016-06-07/draghi-fires-starting-gun-on-corporate-bond-purchases-in-europe

http://www.zerohedge.com/news/2016-06-08/these-are-bonds-ecb-now-buying

http://www.bloomberg.com/quicktake/europes-qe-quandary

ECB Asset Purchase Programme
https://www.youtube.com/watch?v=xZkwu9NRfzs

ECB Conference June 02 2016
https://www.youtube.com/watch?v=uPOUOEMv6zM

How about Junk?
http://www.zerohedge.com/news/2016-06-09/mario-draghi-now-buying-junk-bonds

June 10 update:
Econmatters https://www.youtube.com/watch?v=AnQ7LvpqALU

June 12
Pictet on bonds
https://www.group.pictet/content/dam/pictet_documents/pdf_documents/fixed_income_monthly/FI_Monthly_ARFI_201606_en.pdf






What is Next? Buying Junk Bonds?




Oops.  I hope Mario is not reading the financial press.  He might get more untenable ideas



Links
Remind me, what is a BOND?