Slow change may pull us apart
When the light gets into your heart, baby
In a world of negative interest rate policy (NIRP), how can investors properly discount security prices--particularly yield-bearing instruments? If an investor 'needs' yield, then what price is too high to pay for yield when 'risk-free' rates are suppressed below zero?
My sense is that many are concluding (rationalizing) that no price is too high.
NIRP, it seems, has broken the discounting mechanism.