Archive for the ‘Uncategorized’ Category
May 14, 2013
Notes From Underground will resume Thursday night. I wanted to issue an old piece from the day after the Jackson Hole Symposium of August 2012. It refreshes where were then and looking at the world now. Yes, we’ve reissued this piece before, but once you reread, you’ll see it’s still wildly relevant.
I also want to remind my readers: Bernard Connolly will be on with Rick Santelli this Thursday morning on the Santelli Exchange. It takes place between 10-10:30AM CST. Enjoy (and click on link below to read the post)
Notes From Underground: Jackson Hole is Running on Empty
Tags:Ben Bernanke, Federal Reserve, Jackson Hole
Posted in Fed, Uncategorized | 1 Comment »
April 21, 2013
Tonight’s BLOG headline is attributable to my friend KM after a long conversation about the IMF and G-20 meetings that took place in Washington during the past four days. It appears that Japanese monetary policy was not the subject of derision but rather applauded as a strong measure to lift Japan’s domestic economy out of two decades of malaise. Let me be as clear as possible: There is a full frontal assault being waged on the German model of GROWTH THROUGH AUSTERITY. The first shot fired was several months ago when IMF economist Olivier Blanchard delivered a paper stating that the previous belief that the negative impact on GDP from austerity was not a multiplier effect of 0.5% but rather a greater measure of 0.9-1.5% in its impact so a decease in fiscal spending would create a much greater slowdown than previously thought. The battle was waged in the efforts to limit the sequestration in the U.S. even as IMF Managing Director Lagarde cautioned that U.S. tightening is “too much, too fast and it’s in the wrong place. It’s not right for the U.S. economy and it’s not right for the world.”
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Tags:Eur/Yen, Euro, G-20, GDP, IMF
Posted in Uncategorized | 9 Comments »
March 5, 2013
It seems that Mario Draghi has taken the stance that he can hold off doing any further QUANTITATIVE EASING (QE) as he waits for the policies of the British, Japanese and the U.S. to generate enough growth to allow Europe to muddle through its problems for the next few years. President Draghi seems to believe that if the global economy can achieve a growth rate of 4% or more it will buy time for Europe to begin to correct some of its problems and at least put a halt to its economic downturn. The ECB has accepted the slide in the YEN in the hope that stimulating Japanese growth will alleviate some of the stress of the global economy. The Japanese economy has been a laggard for the last two decades, give or take a year here or there, and it was able to muddle though based on the growth of the rest of the world.
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Tags:BOC, BOJ, ECB, Euro, Mario Draghi, OMT, quantitative easing, Yen
Posted in BOC, BoJ, Currency, ECB, Japan, Uncategorized | 4 Comments »
February 5, 2013
Today, French President Francois Hollande called for a managed currency rate for the EURO. It seems that the French are now concerned that the euro is too strong for its fragile economy. The problem is that as long as ECB President Mario Draghi is happy with a stronger euro the French are in a difficult situation. I have argued that a “strong” euro placates the German hard money crowd. All of the ECB‘s monetary policies have stabilized the break-up risk of the EU while not subverting the currency’s value. Mario Draghi can tell the Germans that his policies are being supported by the market and thus keep Bundesbank President Weidmann at bay. While the BOJ, BOE and the FED have had to actively enact QUANTITATIVE EASING, the ECB has actually seen its intervention contract as money has been paid back and collateral returned. (See last week’s repayment of the LTRO funds.) While the YEN, POUND and DOLLAR have been sold by the market, the EURO has attained star status.
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Tags:AUD/Kiwi, BOE, BOJ, Dollar, Draghi Put, ECB, EUR/CHF, Euro, Fed, Francois Hollande, Mario Draghi, Pound, QE, quantitative easing, RBA, SNB, Yen
Posted in Uncategorized | 3 Comments »
January 13, 2013
It’s sad to report the passing of Yra’s father, Joseph Harris (aka Snake Eyes). Yra will be mourning his father’s passing and will resume writing next Sunday night. Thank you and kiss all your loved ones. (The obituary will be at the Chicago Tribune in the Monday edition.)
Posted in Uncategorized | 29 Comments »
January 9, 2013
Thursday brings the announcements from two of the major rate setters in Europe: the Bank of England and the European Central Bank. First the BOE will announce at 6:00 a.m. CST and consensus says the bank will keep rates steady at 0.50% and the QE program at 375 billion pounds. Though the U.K. economy is soft, Governor Mervyn King will maintain a steady path so to keep his options available in case the global economy begins a new downturn. The present BOE head is retiring July 1 so it would be prudent to let his successor have as many tools to work with in a new regime.
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Tags:BOE, Brazil, China, ECB, Eur/Yen, euribor futures, Euro, nominal GDP, QE, Real, USDA crop report
Posted in Uncategorized | 9 Comments »
August 16, 2012
It seems that the ECB president has for the moment prevailed in a similar way as his MIT cohort Ben Bernanke has been “successful” with his famed Portfolio Balance Channel. Remember, it was Jackson Hole speech of August 2010 in which Chairman Bernanke laid out his view about the importance of the PBC, which was previously referred to by Alan Greenspan as the “wealth effect.” President Draghi has steepened the Spanish and Italian curves by threatening to purchase short-term debt and thus driving the Spanish and Italian 2-YEAR NOTE YIELDS more than 300 basis points lower.
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Tags:Ben Bernanke, Dax index, Gold-backed bonds, IMF, Italian 2-yr notes, Jackson Hole, Lagard, Mario Draghi, Merkel, money markets, portfolio balance channel, QE, Rajoy, S&P 500, Spanish 2-yr notes, William Dudley
Posted in Central Banks, Europe, Uncategorized | 2 Comments »
March 25, 2012
My rest and relaxation evolved into flu-like symptoms. We at NOTES will be up and at ‘em Wednesday.
Posted in Uncategorized | 6 Comments »
January 18, 2012
Today, IMF MANAGING DIRECTOR CHRISTINE LAGARDE announced that she would try to raise more capital to shore up the IMF‘s balance sheet as to be able to aid the peripheral nations of the European Union. Ms. Lagarde was going to approach the members of the G-20 to provide additional funds to prevent a further assault on the European sovereign debt by securing funds to support the troubled sovereigns. The IMF director will be depending on the BRICS and Japan to increase their contributions so as the IMF may actually be able to help GREECE and PORTUGAL meet immediate funding needs and let the ECB and EFSF do the heavy lifting for Spain and Italy. (At this time, the U.S. said they will not be contributing.)
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Tags:2/10 yield curve, 3-year LTRO, BRICS, China, Christine Lagarde, ECB, EFSF, Gold, gold reserves, Greece, IMF, Italy, Jun Azumi, Portugal, serial currency manipulator, Spain, U.S. Treasury, Yen
Posted in Uncategorized | 7 Comments »
