Indeed negative interest rates are a game changer.
It shows the degree of commitment that central banks around the world have to creating inflation via making borrowing attractively cheap coupled with greatly expanded monetary bases from QE.
Australia, being a rare exception, given our commercial bank's haven't had the value of their home loan portfolios called into question given that we haven't had a recession in 25 years.
Though I doubt we will be an exception for long and I suspect the RBA too will be eventually be required to buy toxic home loan assets off the Australian banks to free up their ability to continue to lend to the real economy (ie business).
So if the same happens here and the cash rate goes to 0% (or lower) it would be a no brainer of a trade if investors can borrow on margin for close to 0% to buy companies like MML which are producing FCF yields of 20% - 30%.
At that point it will be a case of, back the truck up!
MML Price at posting:
78.5¢ Sentiment: Buy Disclosure: Held
