Feb 8, 2017

Investors are tripping over themselves to lend Europe money

At first glance, the European Union doesn't seem like the most creditworthy of borrowers. But the Wall Street Journal highlights the massive investor demand for European sovereign bonds, a demand that is enabling countries like Austria to issue bonds at 1% for 70 years.

The Journal looks at countries like Spain, France, and Italy that face outsized political and economic risks in the coming years. These economies are facing slowing or even negative population growth, historically high debt burdens, widening economic inequality, and the rise of populist parties with unorthodox economic philosophies. None of these trends should inspire the confidence of lenders, yet the search for yield has inspired investors to front the money nonetheless.

Why it matters: That bond investors are unafraid of a slow-growing, highly-indebted, and perennially-gridlocked country like Italy defaulting on debt over the next thirty or more years tells us that:

  • Central bank stimulus has helped make government borrowing cheaper;
  • The market thinks that countries have a much higher capacity for debt than politicians do;
  • Significantly higher inflation isn't on the way;
  • The U.S. should seriously consider issuing debt at maturities longer than 30 years. Locking in today's interest rates for 70 or more years would be a godsend to future budgeters.

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Updated 28 mins ago - Politics & Policy

The aftermath of George Floyd's death: Everything you need to know

A mural outside Cup Foods in Minneapolis, near where George Floyd was killed in an encouner with police. Photo: Steel Brooks/Anadolu Agency via Getty Images

Former Minneapolis police officer Derek Chauvin is in jail under $500,000 bail on charges of third-degree murder and manslaughter after a video of him kneeling on George Floyd's neck for more than eight minutes and Floyd's death catapulted the country's major cities into a state of protest.

The big picture: Floyd's fatal run-in with police is the latest reminder of the disparities between black and white communities in the U.S. and comes as African Americans grapple with higher death rates from the coronavirus and higher unemployment from trying to stem its spread.

Updated 30 mins ago - Science

Live updates: SpaceX attempts to launch NASA astronauts Saturday

SpaceX's Falcon 9 rocket on the launch pad. Photo: NASA/Joel Kowsky

At 3:22 p.m. ET today, SpaceX is expected to launch NASA astronauts Bob Behnken and Doug Hurley to the International Space Station for the first time.

Why it matters: The liftoff — should it go off without a hitch — will be the first time a private company has launched people to orbit. It will also bring crewed launches back to the U.S. for the first time in nine years, since the end of the space shuttle program.

Follow along below for live updates throughout the day...

Updated 1 hour ago - Politics & Policy

In photos: Protesters clash with police nationwide over George Floyd

Police officers grapple with protesters in Atlanta. Photo: Elijah Nouvelage/Getty Images

Police used tear gas, rubber bullets and pepper spray as the protests sparked by the killing of George Floyd spread nationwide on Friday evening.

The big picture: Police responded in force in cities ranging from Atlanta to Des Moines, Houston to Detroit, Milwaukee to Washington, D.C. and Denver to Louisville. In Los Angeles, police declared a stretch of downtown off limits, with Oakland issuing a similar warning.