mercredi 11 mars 2015
Goldman’s president is ‘freaked out’ by tanking European bond yields
Posted on 21:54 by nice news
Goldman Sachs’s second-in-command, Gary Cohn is freaked out about the pervading trend of negative interest sweeping across Europe.
Cohn told CNBC’s “Squawk Alley” on Wednesday that negative rates, in which investors effectively pay government bond issuers for holding their debt, “freaks him out.”
Cohn’s frank response is saying something, coming from the towering, 6’4’’ president and chief operating officer of the world’s most prominent investment bank, which is known as a bond trading powerhouse.
The Goldman honcho noted that negative yields make it hard in the insurance, asset management and pension businesses to generate a return. Those institutional investors represent a good chunk of Goldman’s clientele.
Government bond yields in the eurozone have plummeted to record lows since the European Central Bank started purchasing government debt and other bonds on Monday as part of a €60-billion-a-month quantitative-easing program aimed to stimulate the eurozone’s sluggish economy.
Many of the short-term notes in Europe are already in the negative zone, which means that close-to-zero or even negative rates will be pushed further down the yield curve, Cohn explained.
Cohn told CNBC’s “Squawk Alley” on Wednesday that negative rates, in which investors effectively pay government bond issuers for holding their debt, “freaks him out.”
Cohn’s frank response is saying something, coming from the towering, 6’4’’ president and chief operating officer of the world’s most prominent investment bank, which is known as a bond trading powerhouse.
The Goldman honcho noted that negative yields make it hard in the insurance, asset management and pension businesses to generate a return. Those institutional investors represent a good chunk of Goldman’s clientele.
Government bond yields in the eurozone have plummeted to record lows since the European Central Bank started purchasing government debt and other bonds on Monday as part of a €60-billion-a-month quantitative-easing program aimed to stimulate the eurozone’s sluggish economy.
Many of the short-term notes in Europe are already in the negative zone, which means that close-to-zero or even negative rates will be pushed further down the yield curve, Cohn explained.
Goldman’s president is ‘freaked out’ by tanking European bond yields
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