Gosling's Grouse: The negative yield conundrum

Recently Denmark cut its interest rates again, pushing its government debt even further into negative yield territory. And it is not alone.

One of the truly bamboozling aspects of today’s investment environment is this conundrum. Even the likes of BMW and Apple are able to borrow money at what seem like ridiculously low rates. What does this tell us about the world? It says both of these companies are better risks than many nations – Greece, for example, which is perhaps not a surprise. But, in conventional theory, Denmark is a better risk than Apple, even though Apple is bigger than Denmark, if measured by its market cap or cash pile. There can surely only be one explanation for what bond markets are doing at the moment ...