a low yield story

this is not the first time that a low interest rate environment has led to a reach for yield. In the 1820s (yes, you read that right), interest rates on UK government bonds (consols) dropped significantly, and staid investors who used to be happy to live off of the coupons paid by those bonds were forced to take on more risk than they otherwise would have liked to.

In 1825, investors were so willing to suspend disbelief that a Scottish con man named Gregor MacGregor was able to sell over a billion dollars worth of bonds of a completely fictional Latin American country he called "Poyais." I would highly recommend reading the whole story, as it is a fascinating look into investor psychology as well as an entertaining tale in and of itself. This era was characterised by speculative manias and a flood of cheap credit.

Sound familiar? It seems like the more things change, the more they stay the same.