Entire German Curve Drops Below Zero For First Time Ever

entire-german-curve-drops-below-zero-for-first-time-ever

02-08-19 12:56:00,

Somewhere, Albert Edwards is dancing a jig as the ice age he predicted will grip the world, appears to finally be here.

While global equities are sharply lower today following the end of the US-China trade ceasefire, it’s nothing compared to what is going on in the bond market, where one day after the 10Y US Treasury plunged a whopping 6% to 1.832% – the biggest one day drop since Brexit – to the lowest since the Trump election…

… the real show is in Germany, where not only did German 10Y Bunds tumble to the lowest on record, sliding to -0.503%, far below the ECB’s -0.40% deposit rate, the highlight was the plunge in 30Y yield, which today dropped below 0%…

… dragging the entire German yield curve in negative territory for the first time ever.

As such, Germany joined Denmark and Switzerland in offering negative returns across all maturities, and assuring losses to all investors should notes be held to maturity, taking the total stock of investment-grade debt yielding less than 0% above $14 trillion globally.

Enter “Japanification”: as Bloomberg notes, “the move will add to fears that the region’s economic slowdown is being driven by more structural factors akin to Japan’s lost decade”, which is ironic because not even Japan’s 30Ys trade negative. Germany’s bond market is widely perceived as being one of the world’s safest, with investors lured in by the liquidity and credit quality offered. Funds still looking to extract a positive return from European sovereign assets have been forced further out the yield curve or into riskier debt markets such as Italy. And as of today, anyone investing in German paper is guaranteed to lose money if holding to maturity.

“It underlines that the hunt for yield, or rather hunt to avoid negative yields, is accelerating day by day,” said Arne Lohmann Rasmussen, head of fixed-income research at Danske Bank A/S. “It just makes things more complicated.”

In addition to fears about a German recession sparked by the renewed Trump tariff threat, Germany’s bond market is also plagued by a problem of scarcity, with the government mandated by law to effectively maintain a budget surplus.

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German Unemployment Explodes Most Since Financial Crisis, Sending Bund Yields Near Record Lows

german-unemployment-explodes-most-since-financial-crisis,-sending-bund-yields-near-record-lows

29-05-19 01:35:00,

With China failing to spark a global reflationary wave, prompting fears that Beijing’s record credit injection to start 2019 was for nothing and a repeat of the Shanghai Accord won’t take place, coupled with collapsing global trade, which we noted earlier this month…

… on Wednesday Germany reported that its economy appears to have finally hit major pothole as German unemployment unexpectedly surged for the first time in almost two years as the economic slowdown finally started to take a toll on the labor market, according to Bloomberg. Specifically, in May the number of people out of work climbed by 60,000 compared with economists’ forecasts for a decline of 8,000, while the jobless rate also increased to 5% from a record-low 4.9%.

According to Germany’s Federal Labor Agency about two-thirds of the increase was due to reclassification of some people in the statistics, however it also blamed a slowdown in Europe’s largest economy.

“We are seeing the first signs of a weakening economy on unemployment,” it said on Wednesday. It added that demand for new employees is still at a high level, but is softening.

This provided further impetus to buy German bunds, pushing the yield on the benchmark paper further below zero, to a near-record -0.167%.

Until recently, continued strength in Germany’s labor market helped boost consumer spending and support the economy. However, a turnaround in fortunes could be very damaging for Europe’s largest economy, given ongoing weakness in manufacturing and the auto industry, as well as trade tensions that threaten to hit exports. Business confidence plunged this month to the weakest in more than four years.

Naturally, should German growth suddenly hit a brick wall it would have dramatic consequences for the entire Eurozone.

As Bloomberg notes, “a turnaround in fortunes could be very damaging, given ongoing weakness in manufacturing and the auto industry, as well as trade tensions that threaten to hit exports.”

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German Minister Wants To Fine Anti-Vax Parents Up To $2,800, Mandate Compulsory Shots

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06-05-19 12:13:00,

Germany’s Health Minister Jens Spahn wants to fine parents who refuse to vaccinate their children €2,500 ($2,800) in a bid to “eradicate measles,” according to an interview Spahn gave to Bild am Sonntag

“Anyone going to a kindergarten or school should be vaccinated against measles,” he said, adding “Whoever does not get their child vaccinated, faces up to 2,500 euros in fines.” 

A draft law put forward by Spahn would also throw unvaccinated children out of kindergarten, which he says would help protect children too young to receive immunizations. 

“Kindergartens have children under 10 months of age, who are too young for vaccinations and are therefore especially threatened,” he said. 

According to the Robert Koch Institute of Germany, 93% of children are immunized, however this falls short of the recommended rate of 95% to maintain herd immunity. 

Spahn believes he has broad support for his draft law in the ruling coalition of Chancellor Angela Merkel’s conservatives, to which he belongs, and the left-leaning Social Democrats (SPD).

SPD health policy expert Karl Lauterbach spoke of a “very good basis” for a joint discussion. “It will not work without fines,” he told the Augsburger Allgemeine newspaper. –Reuters

Spahn’s bill has a different solution for parents of older schoolchildren, which are required by law to receive an elementary school education. So instead of removing the children from school, parents would just pay a fine. 

For children with health conditions preventing them from getting vaccinated, such as organ recipients or people suffering from leukemia, parents would be required to provide proof of the medical condition. 

By July 2020, all parents who attempt to sign their kids up for kindergartens or schools would be required top provide evidence that their children have been vaccinated. 

Vaccinations would also become mandatory for hospital and other healthcare workers under the new law – which is currently being discussed in the Cabinet and is expected to be adopted this year, with a March 2020 enforcement date. 

 The World Health Organization (WHO) and the United Nations have repeatedly called for action over a recent increase in measles outbreaks across the world.

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German police failed to probe THOUSANDS of tip-offs on refugees suspected of war crimes – reports

german-police-failed-to-probe-thousands-of-tip-offs-on-refugees-suspected-of-war-crimes-reports

07-03-19 01:57:00,

Thousands of war crime-themed cases involving asylum-seekers were referred to the German authorities in recent years, but only a small portion of them was eventually picked up for investigation, a new report has found.

From 2014 to early 2019, the German migration and refugee services referred around 5,000 cases of “crimes under international law” to the police and the attorney general but only 129 cases ended up being investigated, Bild reported on Thursday.

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Migrant in Germany accused of 542 crimes can't be deported because nobody knows where he's from

This included the time between 2015 and 2016 when the nation saw a spike in the influx of migrants and asylum-seekers from the Middle East, Afghanistan and Sub-Saharan Africa. Some 3,800 referrals were filed during that period. Only 28 of those prompted an investigation.

The data was revealed following an official request lodged by the opposition Free Democratic Party (FDP), according to the paper. The report in the media didn’t provide the breakdown of the cases and didn’t specify the countries of origin of the persons involved.

The spokesperson for the Interior Ministry told the paper that the “large number of referrals prevented immediate investigation of each case.”

Lawmaker Linda Teuteberg (FDP), who sits on the parliamentary interior affairs committee, said that war criminals should not be granted protection in Germany.

“I have doubts as to whether the federal government has always pursued this with the necessary seriousness in the past few years,” Teuteberg said.

The effects of migration flows on national security remain a point of contention in Germany as foreign nationals have committed a number of high-profile terror attacks in recent years.

In 2016, Anis Amri, a failed asylum seeker from Tunisia, drove a truck through a Christmas market in Berlin, killing 12 people.

Media reports said that, nine months before the tragedy, the state police in North Rhine-Westphalia had notified the state’s interior ministry that Amri was planning a suicide attack. However, the authorities left the notice unanswered and ruled that the man couldn’t be deported.

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German Poll Shows Germans Stunningly Anti-US-Government

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19-02-19 09:00:00,

German Poll Shows Germans Stunningly Anti-US-Government

On February 8th, the NATO-supporting Atlantik-Bruecke, or Atlantic Bridge, issued their poll, “Vertrauen in der Krise” or “Trust During the Crisis”, and it finds, from scientifically sampling 2,500 Germans, that there is very little trust or confidence in US leadership, and that there is less dis-trust both of Russian and of Chinese leadership than of American. 

Atlantic Bridge was founded by NATO and the Council on Foreign Relations in 1952 in order to make Germans hostile toward the Soviet Union, and favorable toward the United States. It was the prototype for America’s Atlantic Council, which became founded in 1961 — the same year as Eisenhower’s Farewell Address warning against the rise of the “military-industrial complex.” It was created in order to propagandize for higher US military spending to strengthen NATO. When the Cold War ended on the Russian side in 1991 with the breakup of the Soviet Union and the end of communism and the end of the Warsaw Pact military alliance that had been set up by the USSR in 1955 to defend the communist bloc against NATO, US President George Herbert Walker Bush secretly instructed America’s vassal nations on the night of 24 February 1990 to continue secretly the war against Russia and any nation that isn’t hostile against Russia, and so NATO has swallowed up all of the Warsaw Pact nations, right up to Russia’s borders, and is now trying to merge into NATO a former part of the Soviet Union itself, Ukraine, after a US coup in Ukraine in February 2014 installed a racist-fascist, ideologically nazi, anti-Russian regime at Russia’s doorstep.

Here are the new German poll’s main findings:

More than four-fifths of the respondents (84.6 percent) rate the German-American relationship as negative or very negative. Only 10.4 percent find it very positive or rather positive. A clear majority (57.6 percent) argues for a greater distance between Germany and the United States. Only 13.1 percent want a closer approach; 26 percent want to keep the current arrangement. …

Almost half of respondents (42.3 percent) consider China a better partner for Germany than the US. Conversely, only 23.1 percent believe that the US is a more reliable partner than China.

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French & German farmers forced to destroy crops after GMOs found in Bayer/Monsanto seeds

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07-02-19 03:03:00,

French and German farmers have been forced to dig up thousands of hectares of rapeseed fields after authorities found an illegal GMO strain mixed in with the natural seeds they’d bought from Bayer-Monsanto.

Authorities discovered the illicit seeds in three separate batches of rapeseed seeds last fall, but the public has only just been notified. While Bayer issued a recall, by the time the farmers learned of it some of the seeds had already been planted, covering 8,000 ha in France and 3,000 ha in Germany.

Bayer-Monsanto estimated the number of rogue seeds at just about .005 percent of the total volume of rapeseed seeds sold to both nations under the brand name Dekalb, but each country has a ban on GMO cultivation, with strict penalties for “accidental” contamination of standard crops.

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The agrochemical giant refused to estimate the total cost of the GMO contamination, which knocks out not only this season’s crop but also the next season’s, as farmers will be barred from growing rapeseed next year “to avoid re-emergence of the GMO strain,” according to Bayer-Monsanto’s French COO Catherine Lamboley. They offered to compensate farmers €2,000 per hectare, which would work out to about €20 million between both countries.

The cause of the contamination is unknown, Lamboley said, claiming the seeds were produced in Argentina “in a GMO-free area” and declaring that the company “has decided to immediately stop all rapeseed production in Argentina.” The rogue GMO seeds were of a variety grown in Canada that is banned in Europe, although imported food made with the modified rapeseed is permitted for human and animal consumption as long as it is adequately labeled.

Bayer acquired Monsanto for $63 billion last year at a low point in the reputation of the chemical company. The company found itself in the legal spotlight again this week, as French farmer Paul François, who has been fighting Monsanto in court for 12 years, faced his last appeal after a court overturned two previous rulings in his favor.

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German Hyperinflation & the Dawes Plan | Armstrong Economics

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26-12-18 09:57:00,

The German Hyperinflation was by NO MEANS about inflation created by an increase in the money supply under the Quantity Theory of Money (QTM). Today, Angela Merkel has forcefully imposed Austerity upon the whole of Europe because she really does not understand what even caused the hyperinflation. It was at the Palace of Versailles outside Paris when Germany signed the Treaty of Versailles on June 28th, 1919 with the Allies, officially ending World War I. AT that time, the English economist John Maynard Keynes attended the peace conference. However, Keynes left in protest of the treaty becoming the first outspoken critic of what would prove to be the most punitive agreement that only set the stage for World War II and the rise of Adolf Hitler in 1933.

John Maynard Keynes wrote in his The Economic Consequences of the Peace, which he published in December 1919, that the harsh war reparation payments and other harsh terms that they were to impose on Germany by the treaty would lead to the financial collapse of the country. Keynes further warned that this Treaty would result in serious economic and political repercussions on Europe and the world as a whole. The political trend at the time refused to listen. This was all about punishing Germany.

We must also understand that wars are created by politicians – not the people. Prior to the Treaty of Versailles signed in June 1919, there was the German Communist Revolution which began the Weimar Republic. It was this 1918 German Communist Revolution which was inspired by the 1917 Russian Revolution that resulted in the overthrown of the monarchy in Germany ending the Emperors and the king of Prussia. The revolutionary period lasted from November 1918 until the adoption in August 1919. But what also seems to be omitted from many accounts taught in school, is the simple fact that the German government interfered in the Russian Revolution and was instrumental in creating the Russian Revolution.

The German Emperor Wilhelm II Imperial Government actually feared that Russia would enter World War I. The rising communist movement in Russia was anti-war. Germany saw a chance for victory in Europe if it kept Russia out of the war.

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German Refugees Do Not Event Know their Birth Dates | Armstrong Economics

German Refugees Do Not Event Know their Birth Dates | Armstrong Economics

25-09-18 08:24:00,

In Germany, the overwhelming number of refugees have no papers whatsoever. The government remains clueless as to who so many people really are. Over 200,000 refugees/economic migrants have official dates of birth as January 1st. The number is 207,347 persons who have sought protection since 2014 with fictitious birthdays was released by Federal Ministry of the Interior in response to a written request by AFD member Anton Friesen. Most of these people, some 125,408 refugees, were reportedly in Germany in 2015. The government does not know where 60% of the refugees have gone. The Federal Ministry of the Interior admitted in their response that the “date of January 1 is recorded when asylum seekers can not produce passports” and they only are able to their “year of birth but not the exact day or month.” They admit they have no idea how many refugees have given birth to children while in Europe.

Yazidi girl who was sold into slavery by the Islamic State managed to escape and fled to Germany. She was only 15 when her entire family was captured by Isis in northern Iraq four years ago. She was eventually sold along with her sister and all other young teenage girls and she had to live with an Isis member she knew as Abu Humam.

She managed to escape and made it to Germany as a refugee. She was reunited with her mother and several other family members who all managed to flee. Then while walking down the street in February this year, she was stopped by a man. It was her ISIS captor there in Germany. He apparently searched and followed her to Germany. She ran to the authorities for help. They told her that they could not do anything about it because the man was registered as a refugee as well and thus above the law. She then feared for her life and fled Germany going back to Iraq where she said she felt safer there.

Just claiming you have no papers and not even knowing your date of birth, clearly has opened the door to Europe for terrorism. You can’t even make up such stupidity of government programs. There is just common sense in government.

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The German Pension Crisis to Become a Political Issue as in Italy | Armstrong Economics

The German Pension Crisis to Become a Political Issue as in Italy | Armstrong Economics

28-08-18 07:29:00,

The Pension Crisis is starting to be noticed in Europe. The German Finance Minister Olaf Scholz is arguing that the federal government has to guarantee the pension level until 2040. He is arguing that the government MUST come up with a plausible financing model which seems actually impossible. The increase in taxes to cover pension that far out would devastate the younger generations. So far, this Grand Coalition in Germany has agreed on stabilization plan by 2025.  We may see the pension issue become a major factor in the next election. There is no solution as long as Germany continues to adhere to austerity. The only way the pension crisis can be addressed is to inflate out so you pay people with a cheaper currency.

The collapse of Socialism is underway because the people rightly expected all governments to do everything they could to live safely and satisfy their promises of bliss for retirement. They are already witnessing that saving for retirement has not worked when central banks use interest rates to manipulate the economy and in Germany, they have had negative interest rates thanks to Draghi and the ECB. Indeed, in Germany, this policy of austerity is in direct conflict with Socialism. The only way the system has held together this long is because of inflation.

The Pension Crisis is one element behind the rise of political unrest, particularly in Italy. In Germany, the Pension Crisis is starting to fuel the AfD and the nationalist populists in their movement. Scholz has warned that without resolving this issue, Germany will see its own version of Donald Trump take command. Political change is coming and the current crop of politicians have no real answers.

The German magazine, Spiegel, reported that according to estimates by the German Pension Fund, the so-called sustainability reserve will reach around €37.3 billion euros by the end of December 2018. The reserve has been increasing of late 4.4% (year/year) because of the strong employment situation in Germany under its export model. Nevertheless, the pension insurance assumes that by 2023, the contribution rate of 18.6% of gross wages must be increased yet again. This is already a hefty percentage of gross income and it is not going to be enough.

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