4 ms·

Why have so many companies been been betting on 200 year low interest rates continuing indefinitely?

• Stranger43 4y ago
  because none of them did long term statistical modeling or risk evaluation but kept focusing only a few quarters ahead.
• s1artibartfast 4y ago
  Because they need to park Capital somewhere that gives a return, even if it's a small one. It's not a bet that interest will stay low as much as I bet that they as a company will be around in 10 years to see the returns. It's a guaranteed profit if they make it to the finish line.
  • hanoz 4y ago
    Of course it's a bet that interest rates will stay low, as subsequent events have amply demonstrated. Managing to hang on until maturity doesn't magically make it turn into a profit, when you consider the time value of money. The bonds are worth so little today precisely because they're only returning the original amount at maturity, plus 200 year low interest.
• LatteLazy 4y ago
  In fairness, it worked for the first 48-ish quarters they did that for. And they're rewarded for thinking in quarters, not years. Also, stupidity and laziness.