Yield Of Dreams

Irish 10-year yield falls below 1% for the first time in history. How’s that for a turnround? http://t.co/ejHWzfxKh6 pic.twitter.com/sQ1WMg3s32

— Robin Wigglesworth (@RobinWigg) February 25, 2015

We’re back.

Or ARE we?

Anyone?

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27 thoughts on “Yield Of Dreams”

Jonotti February 25, 2015 at 11:38 am

Incredible. You need to add a point indicating FG taking power.

Optimus Grime February 25, 2015 at 11:48 am

Look it if the cash is going cheap we need to borrow shed loads of it sure it’ll only cost more later!

mauriac February 25, 2015 at 11:53 am

negligent not to but the self flagellating Germans would tell f.g. not too…
1. Goosey Lucy February 25, 2015 at 1:02 pm
  
  Maybe FG stands for “flagellating Germans”?!

kerryview February 25, 2015 at 12:01 pm

Just like “What’s a tracker mortgage?”, I haven’t a clue what that chart means. Will it affect the price of a pint?

Keith February 25, 2015 at 12:08 pm

In short, it looks like we can borrow money for practically nothing. As to Optimus Grime’s point, it probably would be an idea to borrow shed loads right now, as long as we use it to buy the more costly debt we previously borrowed (basically changing the interest rate of the old debt to the interest rate of the new one).
1. scottser February 25, 2015 at 12:19 pm
  
  so borrowing from peter to pay paul is sound economic advice now? i must correct my granny at once.
  1. Keith February 25, 2015 at 12:27 pm
    
    Well in this instance, yes. If Peter is willing to lend you a tenner at 1%, and you already owe Paul a tenner at 8%, what is wrong about borrowing from Peter to pay Paul. You’ve only changed lender, but reduced the amount you have to pay back.
    
    The problem is where you borrow from Peter and don’t pay Paul back with it.
    1. Joe the Lion February 25, 2015 at 12:34 pm
      
      better to neither a lender nor a borrower be
    2. newsjustin February 25, 2015 at 1:00 pm
      
      Well put Keith.
    3. Anne February 25, 2015 at 2:46 pm
      
      Yeah..
      
      Worth a watch –
      https://www.youtube.com/watch?v=XcGh1Dex4Yo
  2. Anomanomanom February 25, 2015 at 12:36 pm
    
    Yes it is. If Peter is giving enough at such a low rate you can pay back Paul. Borrow more and still pay way less than before you borrowed off Peter.
    1. scottser February 25, 2015 at 1:22 pm
      
      all very well, but where is peter getting his money from?
  3. Jonotti February 25, 2015 at 1:06 pm
    
    Yes, it is. Stay away from economics posts if you don’t understand them.
    1. scottser February 25, 2015 at 1:25 pm
      
      ah, diddley-jock. shouldn’t you be masturbating?
Diddley Aye February 25, 2015 at 12:12 pm

You had a credit card, paying 10% on the never never.
You got your act together, and now the credit union will lend you money at 1%, allowing you to feed the childer and put new tyres on the car.
Alternatively you can do what your yobby brother does, refuse to pay the Visa bill, and then demand an increase on your credit limit, cos if you dont get it you’ll go on hunger strike or sumtin’
1. scottser February 25, 2015 at 12:20 pm
  
  ah, the wisdom of jock. tell us more, oh great one..
  1. Anne February 25, 2015 at 2:48 pm
    
    ha. He’s some muppet all right isn’t he.

Unreconstructed February 25, 2015 at 12:06 pm

How much is due to the market’s opinion of Ireland and how much is due to the general declines in bond yields across Europe (as a consequence and in advance of QE)? All EU countries are showing these declines…
Perhaps a better graph would be one that shows the spread against German yields. Has the spread closed?
Some part of this decline is due to the improving fiscal position in Ireland (how well we will be able to pay off these debts) but most is due to a general bond yield decline over which we have no influence.
To use these graphs as a sign of Irish economic strength is pure nonsense.

Soundings February 25, 2015 at 12:12 pm

And how does the Irish bond yield compare with ECB interest rates? If the main ECB interest rate was 5%, then those yields would be impressive. But the main rate is at 0.05% and the deposit rate for banks is actually negative! Perspective and context, people, please!

Keith February 25, 2015 at 12:29 pm

The government doesn’t borrow from the ECB so I don’t know what its rate has to do with things. No expert (and can’t be arsed googling) so willing to be corrected.

Owen C February 25, 2015 at 12:20 pm

The question as to how the yield on Irish 10y bonds has changed relative to the German Bund or the rest of the market is a fair one. The ‘spread’ is currently around 65bps. It was almost 300bps (ie 3%) back in 2013, so a huge amount of positive progress since then. It was 153bps a year ago, so quite a bit of progress since then. But its been at relatively similar levels to today at times over the last few months, so its not a particularly new phenomenon.

Domestos February 25, 2015 at 12:48 pm

This man gets it.
newsjustin February 25, 2015 at 1:03 pm

First time below 1% is the point of the post, I think.