Notes From Underground: IF … In a World Of Great Uncertainty

February 23, 2015

Yra:

originally posted on august 15,2012

Originally posted on Notes From Underground:

The travails of the financial markets continue even as the EURO ELITE believe that their holiday time is sacrosanct. Greece is in the headlines as financial pundits with time to fill conjecture about how long it is before the lifeline to the Greeks is cut and its economy and society set adrift outside the “safe” harbor of the EUROZONE.

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Notes From Underground: Will the Dollar Make It Into the FOMC Statement?

February 23, 2015

Originally posted on Notes From Underground:

The FED is on the record as being patient as it tries to achieve its dual mandates of full employment and an inflation rate of 2 percent. In the December 16-17 FOMC release, it said the “… Committee expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate.” While the FOMC statement made no direct mention of the DOLLAR’S STRENGTH, the release of the MINUTES revealed that the dollar had been discussed in reference to inflation. The minutes said: “Participants generally anticipated that inflation was likely to decline further in the near term,reflecting the reduction in oil prices and the effects of the rise in the foreign exchange value of the dollar on import prices.”

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Notes From Underground: Before I Depart for Much-Needed Rest…

February 8, 2015

I’m taking a two-week hiatus as it is time to contemplate the massive volatility we have experienced during the past three months. The rise in vol was no surprise as the world financial and political landscape has been rife with uncertainty for several years. Central bank actions have lulled financial markets into complacency, though turbulence underlies the surface of calm. In the past three weeks we have experienced the Swiss National Bank removing its EUR/CHF PEG and sending currency markets into a whirl of uncertainty. (Plus, the generation of huge losses on long-held short Swiss franc positions.) More importantly, the SNB decision wreaked havoc on European banks that had financed loans in Swiss francs because of the ultra-low interest rates.

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Notes From Underground: Is Tomorrow’s Number a Meaningless Statement?

February 5, 2015

Yes, except if the nonfarm payroll numbers comes in above 300,000 jobs created and/or average hourly earnings rise above 0.4%, reversing last month’s -0.2 %. Consensus is for payrolls to grow by 235,000 but that is in line with the average of the last six months so it will have to be a strong number to give some substance to the more hawkish voices on the FOMC Board. More importantly for Chair Yellen will be the wage growth for if wages lag job growth the Fed will be reticent to raise rates, especially in the face of a strong dollar or the euphemism of” international developments.” In my humble opinion, global financial conditions in the light of European instability will play a larger role in the Fed’s decision to raise rates, which is why I maintain it will take a large number to give voice to those Fed voters wishing to raise rates.

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Notes From Underground: An Open Letter To the Davos Ruling Elites

February 4, 2015

We  are in a period of great political uncertainty. The Greek election is a wake-up call for all the established elites and their sycophants who drink high-priced alcohol to celebrate every new IPO and record high made in global equity indices. The recent victory of Syriza is a call to arms by citizens that have grown tired of broken promises and inept leadership. Fringe parties achieving electoral success in a very short period of time is a critical sign of electorates moving away from the establishment as record-high unemployment has continued for several years and the continued pain of austerity has rendered the European middle class a group without hope. The leaders of Syriza have promised the Greek people that they would throw off the burden of massive debt payments while being enslaved to a policy of FISCAL CONTRACTION.

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Notes From Underground: Is Jim Bullard The Fed PIMP? Domique Strauss-Kahn Wants To Know

February 3, 2015

Today, the trial of former IMF Director Dominique  Strauss-Kahn [DSK] began in Paris. The former IMF director is charged with “aggravated pimping in an organized group.” Well, if DSK is on trial for aggravated pimping, it seems that St.Louis Fed President James Bullard OUGHT to be indicted on a similar charge.

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Notes From Underground: A Well Respected Man About Town

February 2, 2015

The fact that today is GROUNDHOG DAY means that we have to keep discussing Greece again and again. The alarms sound over the demands of Syriza’s and its leader Alexis Tsipras and his efforts to craft a NEW DEAL for Greece in relation to its creditors. Any debt or interest rate relief Mr. Tsipras can attain from the TROIKA would allow his ruling party to declare victory and also provide a template for renegotiation of all previous austerity measures to which European debt plagued nations agreed. (I am not making a qualitative judgment about the Greek restructuring but just raising the issue of the great uncertainty it will cause in currency and bond markets.)

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Notes From Underground: Will the Dollar Make It Into the FOMC Statement?

January 27, 2015

The FED is on the record as being patient as it tries to achieve its dual mandates of full employment and an inflation rate of 2 percent. In the December 16-17 FOMC release, it said the “… Committee expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate.” While the FOMC statement made no direct mention of the DOLLAR’S STRENGTH, the release of the MINUTES revealed that the dollar had been discussed in reference to inflation. The minutes said: “Participants generally anticipated that inflation was likely to decline further in the near term,reflecting the reduction in oil prices and the effects of the rise in the foreign exchange value of the dollar on import prices.”

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Notes From Underground: `Germany Is a National Tea Party’

January 26, 2015

Yra & Rick on CNBCClick on the image to watch Rick and I discuss the political ramifications of the ECB’s QE announcement.

Notes From Underground: Draghi, ECB Declare War on Germany

January 25, 2015

The deed has been done .The ECB, under the guidance of President Draghi and the Eurocrats in Brussels, have set out to punish the Bavarian Burghers by drastically reducing the interest rates on their saving accounts. Why do I say “declare war on German savers?” Up until the recently, Mario Draghi’s jawboning has been successful in calming the fears of sovereign insolvency. But now real money is going to be spent in pursuing some benefit from a robust QE program.

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