Barron's on the bizarro world of negative yielding bonds

There’s a hot new investment trend sweeping global markets: losing money on purpose. Some $13 trillion in bonds worldwide had negative yields as of the end of June, up from $8 trillion at the end of last year.

That works out to $1,700 worth for each person on Earth, which you’d think would be enough to satisfy demand for turning savings into less savings. Nope. The European Central Bank just signaled that it wants to begin pushing yields lower. It recently passed Japan as the No. 1 player in subzero yields.

 Things are getting weird for bonds in Europe. Even some junk-rated debt there pays less than nothing. Greece, which missed the deadline for a loan payment to the International Monetary Fund in 2015, a first for a developed country, now comes in below the U.S. on 10-year yields. Switzerland’s 50-year bonds just went negative. That makes it the second country, after Denmark, to have minus signs across all maturities.

If tight trousers have taught us anything, it’s that developments in Europe can eventually squeeze America. Euro-denominated bonds from companies like McDonald's, Apple, and AT&T are priced for negative yields...

~ Jack Hough, "Why Some Investors Are Buying Bonds That Lose Money," Barron's, July 27, 2019