A few days earlier news started pouring in that a bank in Denmark was offering 10 year home loans at an interest rate of negative 0.5%.
The Story that Baffled the world
Now obviously it took a while for people to process this. But despite spending hours on this absolute joke of a story, people were still left with a ton of questions. How? Why? Where?...
Not to worry. Finshots is here ✊
Well, first thing’s first. This obviously did not happen overnight. Instead, it’s a culmination of almost a decades worth of genius work by some of the most influential central bankers of the world.
Alright, we are kidding. There’s nothing genius about this.
Back in 2008, when the world was reeling from the after-effects of the great financial crisis, central banks the world over wanted to prevent a sustained global recession.
Meaning nobody wanted to see the global economy fall apart on their watch.
So they figured the best way to contain the mess was to flood the economy with cheap money, where everybody could borrow at ridiculously low-interest rates and spend all of that on needless stuff so you know…. the economy could grow? Yeah well, at least that was the plan.
Anyway, this ridiculous idea actually seemed to work for a while, until about 5 years ago, when some European countries really turned it up a notch and introduced negative interest rates.
Meaning they were now incentivizing businesses to borrow money by paying them more money on top of the borrowed money. Absolute Bonkers 🤯
And that brings us to today where you have a Danish bank that’s willing to offer you negative interest rates on a 10 year home loan.
Now it's not like the banks are stupid here alright? They’re probably borrowing at rates lower than the negative interest rates they are offering. Also with bank fees and stuff, they’ll probably still eke out a profit. So it’s not all that bad.
Or is it?
Recession Incoming? 😨
The Denmark case should serve as a reminder that there are investors out there who are willing to lend you money for many many years expecting very little in return
Think about it for a moment. 🤔
If investors have lost all hope of ever making any money in the current economic landscape. What does it tell you about the economy as it stands today?
Yeah… It's going to the gutter. That’s what it says
Also just a couple days back. The Fabled Yield Curve inverted once again sparking fears about a looming recession.
An inverted yield curve marks a point on a chart where short-term investments in U.S. Treasury bonds pay more than long-term ones
Imagine your bank offered you a higher interest rate on a 6-month fixed-deposit over a 10 year fixed deposit. That’s the bank telling you they’ll pay you more money for withdrawing money in 6 months as opposed to 10 years. That’s what’s been happening in the US and clearly, there’s something completely messed up about this equation
And since many many recessions in the past were preceded by a Yield Curve Inversion of the sorts we witnessed the other day, there was pandemonium on the streets soon after and the markets tumbled.
A Dummy’s Guide to the WeWork IPO
So WeWork is going public soon and we thought it would be nice if you could hear from WeWork itself on why you should invest in the company
Hi, I’m WeWork,
My mission is to elevate the world’s consciousness 🕉️
On the side… I provide creative work-spaces for companies to work out of. And I can get pretty creative when I want to. I once offered perks like all-day free beer to employees and hosted annual music festivals. Meanwhile, I keep getting distracted by the stuff that I am actually supposed to do.
Anyway, I’m now going public, suckers! And I will soon join ranks with my fellow loss-making comrades — Uber and Lyft.
Also, More on Losses 🙃
I am making huge losses and I will keep making losses. In fact, I may never become profitable, like ever. Funny right?
Also, the shares that you’ll be offered. Yeah, they may not be worth all that much because you will have very little say in what we do even if you own them. Because you see, my CEO wants to play God and he’s the one who makes all the final decisions.
But do invest in me. Because, HEY! I might change in the next 18 months, even though I don’t plan on sharing any profits with you any time soon (that is if I make any 😂). Like I said, I am making huge losses. Er… so yeah, invest in me, and let’s get creative!
P.S. This is Satire 🤣
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Until next week then ...