The Daily Update: Greek Negative Yields / Salesperson of the Year

The combined experience of the fund managers here at SSC we have worked out to be well over 150 years, so it’s safe to say the between as all we have lived / traded / run money through most scenarios. However, with Greek 5-year bond yield turning negative for the first time ever, it goes to show that markets can still raise an eyebrow for anyone, no matter how long in the tooth you are.

Earlier this week Greece’s five-year bond yield fell below zero for the first time, after the European Central Bank said it would maintain its pace of asset purchases which in turn prompted a rally in riskier eurozone debt. The move means that Italy is the only country within the eurozone with a positive five-year bond yield, just 8.3 bps in the black. It's not just the 5-year that is in demand. Athens took advantage of the recent rally by selling EUR2.5bn of new 10-year bonds last week, the deal was 12 times oversubscribed.

Why would you pay Greece to borrow money for 5 years, which Moodys rate at Ba3 ? This is a country that was locked out of the debt markets and needed a series of bailouts a few short years ago. It lost about a quarter of its output during its 2010-2018 debt crisis. It had a debt to GDP of over 213% last year, with this year’s not much better at over 210%. Its unemployment rate is over 16%, with youth unemployment at nearly 33%. We have Greece as a one star rated country on our Proprietary Net Foreign Asset (NFA) Scoring system, and that is only because we don’t have a zero-star rating. Of course, we realise that ultimately you are not buying Greece on the fundamentals but on the fact that the EU is the buyer, they own most of it anyway, however it does beg the question of why would you even consider it?

Plus a clear favourite has emerged for the salesperson of the year 2021. Salvatore Garau, a 67-year old Italian artist, has just sold an ‘invisible’ sculpture for more than $18,000!! The invisible piece was initially put up for auction at between $6,000 and $9,000. However, the price surged after a flurry of initial bids. Garau posted a ‘picture’ of the sculpture on social media, demonstrating how easy it is to install the piece in multiple locations. Guessing the upside is that there won’t be any delivery costs to worry about if the buyer wants to take the sculpture home !!