{"id":46356,"date":"2019-05-25T11:24:28","date_gmt":"2019-05-25T16:24:28","guid":{"rendered":"https:\/\/olduvai.ca\/?p=46356"},"modified":"2019-05-25T11:24:32","modified_gmt":"2019-05-25T16:24:32","slug":"negative-interest-rates-spread-to-mortgage-bonds","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=46356","title":{"rendered":"Negative Interest Rates Spread To Mortgage Bonds"},"content":{"rendered":"\n

Negative Interest Rates Spread To Mortgage Bonds<\/a><\/h3>\n\n\n\n

There are trillions of dollars of bonds in the world with negative yields \u2013 a fact with which future historians will find baffling.<\/p>\n\n\n\n

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds. <\/p>\n\n\n\n

Bankers Stunned as Negative Rates Sweep Across Danish Mortgages<\/strong><\/a><\/p>\n\n\n\n

(Investing.com) \u2013 At the biggest mortgage bank in the world\u2019s largest covered-bond market, a banker took a few steps away from his desk this week to make sure his eyes weren\u2019t deceiving him.<\/p>\n\n\n\n

As mortgage-bond refinancing auctions came to a close in Denmark, it was clear that homeowners in the country were about to get negative interest rates on their loans for all maturities through to five years, representing multiple all-time lows for borrowing costs.<\/p>\n\n\n\n

\u201cDuring this week\u2019s auctions, there were three times when I had to stand back a little from the screen and raise my eyebrows somewhat,\u201d said Jeppe Borre, who analyzes the mortgage-bond market from a unit of the Nykredit group that dominates Denmark\u2019s $450 billion home-loan industry.<\/p>\n\n\n\n

For one-year adjustable-rate mortgage bonds, Nykredit\u2019s refinancing auctions resulted in a negative rate of 0.23%. The three-year rate was minus 0.28%, while the five-year rate was minus 0.04%.<\/p>\n\n\n\n

The record-low mortgage rates, which don\u2019t take into account the fees that homeowners pay their banks, are the latest reflection of the global shift in the monetary environment as central banks delay plans to remove stimulus amid concerns about economic growth.<\/p>\n\n\n\n

Denmark has had negative rates longer than any other country. The central bank in Copenhagen first pushed its main rate below zero in the middle of 2012, in an effort to defend the krone\u2019s peg to the euro. The ultra-low rate environment has dragged down the entire Danish yield curve, with households in the country paying as little as 1% to borrow for 30 years. That\u2019s considerably less than the U.S. government.<\/p>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Negative Interest Rates Spread To Mortgage Bonds There are trillions of dollars of bonds in the world with negative yields \u2013 a fact with which future historians will find baffling. Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3172,88,213,7544,25946,558],"class_list":["post-46356","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bankers","tag-bonds","tag-dollar-collapse","tag-john-rubino","tag-mortgage-backed-bonds","tag-negative-interest-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=46356"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46356\/revisions"}],"predecessor-version":[{"id":46357,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46356\/revisions\/46357"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}