It comes with a bottle of tequila to make you forget buying it

The Mexican government treasury has just done something quite clever. It has just sold a bond. But this is not a normal bond. It’s a bond that perfectly capitalises on the bond market’s current bout of crazy-mad yield chasing.

Mexico has borrowed one billion US dollars (not Mexico’s native currency, so another tequila crisis would make the debt extremely difficult to service), at a yield of 6.1%… which might sound great, until you find out that the bond lasts for one hundred years.

This from a country that in the last hundred years has defaulted on its debt at least twice, restructured (forcing bondholders to take a haircut) at least once, and experienced inflation rates as high as 160%. I don’t see how the odds of the bond being paid back at par can be any better than fifty-fifty - probably far lower.

Those who do not (1914) learn (1921) from (1982) history (1994) are condemned to repeat it.