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:check:Low/Negative rate (Impact (on Industry (Start-ups: booming amid…
:check:Low/Negative rate
Reasons
Howard Marks
Longevity
Yield seeking, risk aversion
Buy more LT bonds, YTM on the decline
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Impact
on Industry
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Insurance: edge from float will disappear;
social insurance funds may bankrupt sooner as they can only invest govt bonds (now at brink of negative rate)
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on Asset Classes
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Stocks: traditional financial model failure (efficient frontier, CAPM, option pricing with positive rate assumption)
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on Social Classes
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Fear of market uncertainty
Save more despite penalty, not spend more
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