Bond investors just keep piling on the risks

[Bloomberg]( Follow Us //link.mail.bloombergbusiness.com/click/19257055.48709/aHR0cHM6Ly90d2l0dGVyLmNvbS9ib3Bpbmlvbg/582c8673566a94262a8b49bdBe624ee8f This is Bloomberg Opinion Today, a junk-bond index fund of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Bond investors keep going out on [thinner limbs](. - Goldman [does the right thing]( on diversity. - [Lack of rules and precedents]( undermines impeachment. - The coronavirus is [rattling the luxury industry](. There's gotta be yield in here somewhere! Photographer: VALERY HACHE/AFP/Getty Images Debts Go Crazy, Debts Get Nuts Warning people that markets are bonkers is kind of a pointless exercise. The market can stay bonkers for a long, long, long time, and eventually you’re the one who starts to look bonkers. Nevertheless, this newsletter is contractually obligated to once again report, as it has been [doing]( for a while now, that the bond market is bonkers. Yesterday, Marcus Ashworth wrote that investors are trampling their grandmothers to get their hands [on CoCo bonds](, or contingent convertibles, which are what European banks use to make themselves less risky by passing the risk on to you, the investor. Typically the reward you get for this is a very high interest rate. Yesterday, though, an Austrian bank sold CoCos with an interest rate of … 3.375%. For comparison, that is just a frog’s whisker away from what you would have gotten lending the U.S. government money for 10 years as recently as November. It’s not much, in other words. Still, it is better than nothing, or less than nothing, and for that exorbitant luxury investors have been willing to [give away many protections]( they typically get in such deals. The wizards building collateralized loan obligations, for example, keep finding crafty new ways to [weaken]( covenants. Protections for junk-bond investors are disappearing too, notes Brian Chappatta, even as yields on the highest-rated junk debt tumble to … less than 3.5%. Again, that’s not much: There are faint signs of investor discomfort with this state of affairs, Brian writes, but not enough. Bonds are traditionally considered “safe” investments, but bond investors are increasingly not putting safety first. Read the [whole thing](. Bonus Weird Markets Reading: Stocks are doing this strange thing where big tech companies and plodding quality companies are [both wildly overpriced](. — John Authers Goldman Sachs Does Good Thing It’s as easy as sinking into a warm bath to be cynical about Goldman Sachs Group Inc. announcing it will no longer do IPOs for companies in the U.S. or Europe without at least one person on the board who is not white or not a straight male. For one thing, as Matt Levine notes, having this [bare-minimum level of diversity]( is already “market standard.” Goldman’s not costing itself too much business here. Also, just to reiterate, this is Goldman Sachs we are talking about, which needs all the PR help it can get. Still. Goldman’s virtue-signaling has the virtue of … signaling a virtue, which will [compel rival banks]( to signal their own virtues, notes Elisa Martinuzzi. And Goldman will raise its diversity standard to two board members next year, forcing another round of commitments. Next thing you know, the Overton Window on corporate diversity has been widened just that much more, and even the most cynical newsletter writer must admit that is a good thing. Back to the Impeachment: Where We’re Going We Don’t Need Rules One of the weirdest things about the impeachment trial of President Donald Trump is how much time and energy has been spent on simply establishing the ground rules. Sure, any trial involves lots of pretrial motions and haggling about witnesses and such, but at least those happen within a set framework of rules and precedents. But this is only the third impeachment trial in history, and Americans have [already forgotten everything]( about the most recent one, notes Noah Feldman, even though it was only in 1998, for God’s sake. Thus lawmakers get bogged down in endless fights about the rules, using partisan arguments, which makes the whole process seem less fair and less legitimate. Further Impeachment Reading: It probably won’t work, but it’s smart of [Democrats to try flattering]( Senate Republicans. — Jonathan Bernstein Telltale Charts The continuing [spread]( of the Wuhan coronavirus, just as the Lunar New Year begins, [threatens a global luxury industry]( that had so far weathered Hong Kong protests and trade wars, writes Andrea Felsted. Age discrimination is [rampant in the U.S.]( but makes no sense economically, writes Leonid Bershidsky. Further Reading Trump’s Middle East peace plan looks like a [great deal for Israel](. — Eli Lake Italy’s Five Star party is on [the verge of collapse](, and good riddance. — Ferdinando Giugliano Nicolas Maduro is on [increasingly shaky ground](, but the U.S. shouldn’t be the one pushing him. — James Stavridis A $10 billion Roundup settlement could [net Bayer much more]( in stock-market valuation. — Chris Hughes The Jeff Bezos hack is a reminder of a [physical component]( to the growing array of cyber threats. — Lionel Laurent [Transaction costs and hassles]( are hurting the economy. — Noah Smith ICYMI Boeing Co.’s [massive 777X]( had its first flight. Elizabeth Holmes [phoned in her own defense]( in a civil suit. Philippine companies are making roads and cement [with plastic garbage](. Kickers Reminder: [Do NOT shower]( on your motorbike. (h/t Scott Kominers) Listen to the [re-created voice]( of an Egyptian mummy. Brain scans suggest [reading to a preschooler]( is way better than giving them an iPad. Consciousness may [pervade the universe](. Note: Please send brain scans and complaints to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Twitter]( and [Facebook](.  Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](.  You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022