Denmark's Jyske Bank lowers its negative rates on deposits • Hacker News Board

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#101

Post by jVinc » Sat, Sep 21, 2019, 11:35 PM UTC

dev_dull wrote: post #60

JamisonM wrote: post #48

It strikes me that with an absurdly low debt-to-gdp ratio of 34% and negative interest rates maybe the Danish government should invest more money in their economy. Maybe leverage the market to build the enormous amount of green infrastructure they and the world needs, the returns don't need to be that high to pay off.

Denmark has high oil and gas reserves, which partly is why their debt-to-gdp is so low. Why would they benefit in green energy infrastructure?

> Why would they benefit in green energy infrastructure?

The worlds largest Wind Turbine Manufacturer Vestas is danish.

Besides them, there's lots of green energy infrastructures companies that are expanding. Also of note, the Large Danish companies LEGO and Novo Nordisk have already gone 100% CO2 neutral on productions through various offsetting initiatives[1]. Oil money is not something to flush down the toilet, but the country is moving very heavily in the green direction. The oil will dry up, or we'll reach a point where it's political suicide to keep going after it. But the wind will keep blowing and the sun will keep shining.

[1] yes that's not enough, but a good milestone on the road forwards

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#102

Post by bearjaws » Sun, Sep 22, 2019, 2:31 AM UTC

generatorguy wrote: post #93

bearjaws wrote: post #42

Earlier quoted context omitted.

Making an investment asset out of a requirement to survive is capitalist insanity. The housing market crashes every 10-20 years, while most mortgages are 30 years, this means that many people stand to lose their entire "investment", but oh wait, its their home , not their fucking Robinhood account. Saying that things are going well, therefore we are making good decisions is a terrible argument.

The loss or gain is not realized until the home owner sells the house. So just don’t sell during the crash.

People don't foreclose on their homes because they want to.

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#103

Post by generatorguy » Sun, Sep 22, 2019, 3:13 AM UTC

bearjaws wrote: post #102

generatorguy wrote: post #93

Earlier quoted context omitted.

The loss or gain is not realized until the home owner sells the house. So just don’t sell during the crash.

People don't foreclose on their homes because they want to.

I thought in 2008 People were walking away as soon as they were underwater ?

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#104

Post by JamisonM » Sun, Sep 22, 2019, 5:04 AM UTC

gridlockd wrote: post #91

JamisonM wrote: post #89

Earlier quoted context omitted.

Setting economic policy based on fighting 1970's inflation battles instead of accepting the evidence that the US economy is finally near or at full employment by sustaining a low interest rate environment contrary to evidence and experience. Full employment is good for workers and less-good for asset owners. Governments can borrow money to build infrastructure that make people's lives better, I don't know how you can…

> Setting economic policy based on fighting 1970's inflation battles instead of accepting the evidence that the US economy is finally near or at full employment by sustaining a low interest rate environment contrary to evidence and experience. Full employment is good for workers and less-good for asset owners. You can always point to numbers that are supposedly good (such as questionable government-issued employment…

IDK, the closest approximation of full employment we've seen since the second world war has been the product of low interest rates.

Conversely fretting about debt in the way you describe, with a concern about the value of present investment in physical infrastructure for the future, has proven over and over again to be unfounded (tax cuts are otherwise clearly a case of leaving money on the table now that will not benefit the future). You'll see.

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#105

Post by gyuserbti » Sun, Sep 22, 2019, 10:26 AM UTC

sword_smith wrote: post #4

When people borrow money for a house, they only consider the monthly payments for the mortgage and not the absolute amount of money they are borrowing. This means that low interest rates are the main reason behind surging house prices and is why people have to spend decades paying back loans and being vulnerable to a drop in house prices. It creates too much debt in society and generally makes the economy more fragil…

The special thing about housing though is you have to pay monthly payments for housing. This is the reason why those monthly payments are privileged in consideration.

So the alternative is rent, which at the moment in many places is looking like a less appealing alternative.

The transfer of wealth in the housing market happens from one group to another regardless.

I agree with a lot of your sentiment and what you're saying, but I think the monthly payment focus isn't irrational.

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#106

Post by ptr » Sun, Sep 22, 2019, 1:24 PM UTC

Yetanfou wrote: post #43

hourislate wrote: post #37

Earlier quoted context omitted.

We can add Canada to the list. If Interest rates were to rise just a few percent, it would bankrupt the entire country.

Add Sweden as well, same story here. The national bank (Riksbanken) can not increase interest rates because it would have disastrous consequences for the large majority of over-extended loan takers. The low interest rates in their turn lead to the value of the Swedish currency plummeting. No matter what they do, a 'correction' is unavoidable - either the Swedish crown goes to junk status or the number of foreclosures…

I’m not so sure that a rate hike would be devastating for Swedish loan takers; banks typically don’t give out loans to households that can’t handle large increases. Real estate prices would probably come down a bit, but people would hardly be forced to sell as long as they keep their income. People with large loans typically have large financial buffers.

I’m also suspecting that politicians will step in with deductions, etc.

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#107

Post by gridlockd » Sun, Sep 22, 2019, 1:53 PM UTC

JamisonM wrote: post #104

gridlockd wrote: post #91

Earlier quoted context omitted.

> Setting economic policy based on fighting 1970's inflation battles instead of accepting the evidence that the US economy is finally near or at full employment by sustaining a low interest rate environment contrary to evidence and experience. Full employment is good for workers and less-good for asset owners. You can always point to numbers that are supposedly good (such as questionable government-issued employment…

IDK, the closest approximation of full employment we've seen since the second world war has been the product of low interest rates. Conversely fretting about debt in the way you describe, with a concern about the value of present investment in physical infrastructure for the future, has proven over and over again to be unfounded (tax cuts are otherwise clearly a case of leaving money on the table now that will not be…

> Conversely fretting about debt in the way you describe, with a concern about the value of present investment in physical infrastructure for the future, has proven over and over again to be unfounded

Not true. If you want to see that idea of economic policy fail, look at Turkey under Erdogan:

https://en.wikipedia.org/wiki/Turkish_currency_and_debt_cris...

The reason that Erdogan couldn't pull off this con for as long as the US is that he can't print Dollars or Euros. However, even those "reserve currencies" eventually can lose investor faith. You're just speculating that they never will.

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#108

Post by oblio » Sun, Sep 22, 2019, 3:18 PM UTC

Yetanfou wrote: post #100

oblio wrote: post #76

Earlier quoted context omitted.

Which neighboring country could mount a huge amphibious assault against a developed island nation with still 100+ million people? The only threat is China and China's aging too...

China, Russia and possibly Korea (which army is far larger than Japan's) come to mind. While Japan still does have 100+ million people the population is going to shrink and those who live there are getting older and older. The low birth rate will make it hard for Japan to maintain a standing army, the ageing population also makes it harder to maintain a reserve force.

Russia has 20 million people more than Japan and its population is also aging rapidly.

Korea? Which one? North Korea? Please :-)

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#109

Post by JamisonM » Sun, Sep 22, 2019, 5:29 PM UTC

gridlockd wrote: post #107

JamisonM wrote: post #104

Earlier quoted context omitted.

IDK, the closest approximation of full employment we've seen since the second world war has been the product of low interest rates. Conversely fretting about debt in the way you describe, with a concern about the value of present investment in physical infrastructure for the future, has proven over and over again to be unfounded (tax cuts are otherwise clearly a case of leaving money on the table now that will not be…

> Conversely fretting about debt in the way you describe, with a concern about the value of present investment in physical infrastructure for the future, has proven over and over again to be unfounded Not true. If you want to see that idea of economic policy fail, look at Turkey under Erdogan: https://en.wikipedia.org/wiki/Turkish_currency_and_debt_cris... The reason that Erdogan couldn't pull off this con for as lon…

Yeah, don't borrow in someone else's currency is a pretty important point, the 10 year Danish Krone Bond is at a -0.48%. If you have to borrow in someone else's currency then you are absolutely /not/ the same position that Denmark is right now.

Re: Denmark's Jyske Bank lowers its negative rates on deposits

#110

Post by Yetanfou » Mon, Sep 23, 2019, 9:42 PM UTC

oblio wrote: post #108

Yetanfou wrote: post #100

Earlier quoted context omitted.

China, Russia and possibly Korea (which army is far larger than Japan's) come to mind. While Japan still does have 100+ million people the population is going to shrink and those who live there are getting older and older. The low birth rate will make it hard for Japan to maintain a standing army, the ageing population also makes it harder to maintain a reserve force.

Russia has 20 million people more than Japan and its population is also aging rapidly. Korea? Which one? North Korea? Please :-)

South Korea or a reunited Korea - keep in mind that I'm talking about possible future scenarios, decades from now. There has been and still is a lot of animosity between Korea and Japan [1], this goes back centuries.

[1] https://en.wikipedia.org/wiki/Anti-Japanese_sentiment_in_Kor...