Bundesrepublik Deutscheland Finanzagentur GmbH (German Finance Agency) was created on September 19, 2000, in order to manage the German government’s short run liquidity needs. GFA took over the task after three separate agencies (Federal Ministry of Finance, Federal Securities Administration, and Deutsche Bundesbank) had previously shared responsibility for it. On September 17, 2014, almost exactly fourteen years later, GFA managed to sell 2-year federal paper for the first time at a negative yield. Pricing at -0.07%, the streamlined success of the auction process was hardly the reason.

The difference between September 2000, indeed all the Septembers before that year and the several after it, and September 2014 was that Septembers in 2008 and 2011 lay in between. Feeling no urge to digress, at this point, into why it is always the early autumn that seems destined to mark such occasions, at the time the newsworthy auction was described in the way it is always described. From the Wall Street Journal that day:

Investors paid a hefty price for the privilege of buying German government debt Wednesday, in a fresh sign of how the European Central Bank’s monetary policies are upending the region’s bond markets.

For mainstream outlets like WSJ, this was a good thing. Lower interest rates, after all, make it cheaper for people and businesses to borrow, the very thing the ECB declared it was after. The nature of “stimulus” above the zero lower bound was unquestioned, but despite that there was a little unsettling feeling to dropping below it as far out as two years even if it was in Germany.

Just a few months ago, in late February 2017, the German 2s had reached truly ridiculous proportions, “yielding” just above -100 bps. At the time, the decay in yields was then put down as alarming, attributed to French election unease; from “stimulus” to populism fears in two and a half years. Suffice to write, there isn’t a whole lot about German bunds or bonds in general that makes sense to the mainstream accustomed to describing central banks that so easily get everything they want.