Here's a trip down memory lane... paper from the 80's talking...

Here's a trip down memory lane... paper from the 80's talking about apparent neg. rates in the US 1930's:

https://www.researchgate.net/public...of_Interest_Rates_during_the_Great_Depression

The author was obviously very sure that negative rates can't happen. Quote from the intro:

"Since negative nominal yields are impossible in a world where one can always hold cash, these securities must have had other attributes that were being valued".

Turns out that nominal yields in the 30's weren't negative. From the data in the appendix (collected from newspapers of the day and adjusted for 'exchange privilege' by the author) for those interested here's what yield curves possibly looked like for 1930 - 40:





I think the basic question remains the same today:

Are there attributes of today's negatively yielding bonds that make them worthwhile? I can think of only a few for EZ bonds (regulation being one), and for longer issues none of them justify holding to maturity.

Here's what a price insensitive govt. backed prop shop full of academics looks like apparently:



"It is kind of easy to actually do the trade"... classic first line.