Junk-Bond Sellers Desperate for Funding Swallow Yields over 10% • Hacker News Board

Re: Junk-Bond Sellers Desperate for Funding Swallow Yields over 10%

#71

Post by johnrgrace » Wed, May 06, 2020, 6:19 PM UTC

mrep wrote: post #42

TheAdamist wrote: post #29

Earlier quoted context omitted.

No one, they dont even have enough parking for them to all be idle simultaneously. The airport rental agencies near me have been renting out all the stadium parking nearby to use as overflow storage.

Yeah, I saw on reddit last month a possible insurance scam in which 3500 rental cars caught fire in an overflow parking lot in florida because they are all sitting around unused [0]. [0]: https://www.cnn.com/2020/04/05/us/airport-fires-cars-trnd/in...

It wasn't an insurance scam because they don't have insurance, they are going to eat the cost of all of those vehicles.

Re: Junk-Bond Sellers Desperate for Funding Swallow Yields over 10%

#72

Post by [deleted] » Thu, May 07, 2020, 3:14 AM UTC

mrep wrote: post #65

snidane wrote: post #52

Earlier quoted context omitted.

Real interest rate depends on inflation which is an invented phenomenon of the 20th century. Inflation wasn't relevant in the preceding century and might not be relevant in 21st century either. At least not in the current form it is measure as a CPI while ignoring asset price inflation in real estate and stock markets. Whether that is a bug or feature remains to be seen, but for most people a psychological effect of…

> while ignoring asset price inflation in real estate and stock markets. Do you have any data to back this up? Some quick math shows annualized S&P 500 Return with dividends reinvested from april 2010 to april 2020 are 9.694% [0] which is entirely in line with historical returns [1]. Housing price per square foot hasn't really changed for most people either [2]. [0]: https://dqydj.com/sp-500-return-calculator/ [1]: h…

[deleted]

Re: Junk-Bond Sellers Desperate for Funding Swallow Yields over 10%

#73

Post by banku_brougham » Thu, May 07, 2020, 5:46 AM UTC

snidane wrote: post #52

bald wrote: post #38

Earlier quoted context omitted.

In order to draw a conclusion, we should look at the _real_ interest rate vs. the nominal one.

Real interest rate depends on inflation which is an invented phenomenon of the 20th century. Inflation wasn't relevant in the preceding century and might not be relevant in 21st century either. At least not in the current form it is measure as a CPI while ignoring asset price inflation in real estate and stock markets. Whether that is a bug or feature remains to be seen, but for most people a psychological effect of…

Your premise is quickly disprovable with reference to historical inflation data from many countries. Maybe try the Bank of England, they have data that goes back a ways.

OTOH perhaps we should give the author of The Wealth of Nations more credit for having anticipated the phenomenon of inflation back in 1776.