Posts Tagged ‘CDU’

Notes From Underground: 500 Days of Summers … NOT

September 15, 2013

As the markets were heading into the close on Friday afternoon, I noticed that silver and gold were rallying and the newswire failed to provide any headline for the a substantial price rise. (There was no Syria news or any other type of geo-political event.) The weekend news also failed to support the rally at least until a few hours ago when the Washington Post ran a headline announcing that Larry Summers had withdrawn his name for consideration for Chairman of the Fed. Many pundits have been maintaining that Summers would be quick to end the entire QE program and thus would have a negative impact on all asset prices. Nonsense in the first degree, but as a trader, the first rule is to respect prices. The removal of Summers has led to the U.S. dollar selling in early Asian trading as the anticipation is now the Fed will be under a Chairman more in step with the Bernanke method of central bank theory.

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Notes From Underground: The Outcome of Jackson Hole … It’s All Theoretical

August 27, 2013

At Jackson Hole there was no Ben Bernanke so therefore no policy announcements as in August 2010 when the famous PORTFOLIO BALANCE CHANNEL (PBC) speech signalled a major shift in Fed policy. Last year was similar as the Fed Chairman used Jackson Hole to alert the market to another round of QE. The most senior Fed official was Janet Yellen and she served more as a panel moderator. This was no place to stake out Vice Chairman Yellen’s claim to the chairmanship. So the discussions of the week were as always, esoteric and academic. But the key take away: There were several papers delivered by acclaimed academics who disagreed with the FED‘s policy of large-scale asset purchases and quantitative easing. Therefore, the conclusion is that the FED‘s present policy is highly theoretical and not based on a SCIENTIFIC proof and the entire basis of QE is open to critical analysis. The talking heads want to believe that TAPERING has a certain outcome. By definition, theoretical outcomes are theoretical and based on probabilities.

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Notes From Underground: MAY 6 — A Flash Crash For the European Political Elite

May 6, 2012
Before politics, it is important to review the two big stories from Friday:
1. The U.S. unemployment data was certainly on the weak side of expectations as nonfarm payrolls came in at a tepid 115,000, very close to the ADP report. Average hourly earnings were soft, which will challenge the view of consumer demand ramping up any time soon. Yes, the unemployment rate dropped to 8.1%, but with so many people dropping out of the job market this indicator lends itself to so much POLITICAL SPIN THAT ITS USE IS BECOMING NEGLIGIBLE. Economists have twisted its meaning and therefore markets are disregarding its usefulness. The real positive in the data was the continue growth in MANUFACTURING as 16,000 factory jobs were created. Otherwise, the number was weak and will be a reason for the FED TO KEEP THE MUSIC OF OPERATION TWIST IN PLACE.
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Notes From Underground: SPANISH MISSTEPS TRIP UP ITALIAN DEBT

November 15, 2011

TO OUR READERS: WE’RE REISSUING LAST NIGHT’S PIECE AS MANY OF YOU DID NOT RECEIVE THE POST BECAUSE OF A WORDPRESS GLITCH. ENJOY!

The DEBT markets in Europe renewed the sombre tone of a collapse of Italy and Spain. In the early part of the European trading day, the Italian BTP was holding on to last week’s gains and outperforming the BUNDS to the upside. As the day wound to a close, the “negative” news out of the Merkel’s CDU conference pressured the DEBT markets as new fears arose that the German Chancellor had her party’s support for the jettisoning of some of the weaker peripherals.

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Notes From Underground: SPANISH MISSTEPS TRIP UP ITALIAN DEBT

November 14, 2011

The DEBT markets in Europe renewed the sombre tone of a collapse of Italy and Spain. In the early part of the European trading day, the Italian BTP was holding on to last week’s gains and outperforming the BUNDS to the upside. As the day wound to a close, the “negative” news out of the Merkel’s CDU conference pressured the DEBT markets as new fears arose that the German Chancellor had her party’s support for the jettisoning of some of the weaker peripherals.

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Notes From Underground: The European Union KICKS GEITHNER’S CAN DOWN THE ROAD

September 18, 2011

Friday and Saturday were the days that U.S. Treasury Secretary Geithner was in Poland sitting in on an ECOFIN meeting to try to persuade the financial policy makers of the EU to come to some type of resolution on a bailout of the PIIGS, an increase in the European Financial Stability Facility, and, hopefully, some program of support for the recapitalization of the European banking sector. Geithner pressed the ECB and European Governments to increase the 440 billion EURO EFSF rescue fund by utilizing leverage in its buying of sovereign debt. The tone of Geithner’s message was that the U.S. has woken up to the huge threat the EU debt crisis poses for the American economy, and, of course, President Obama’s election chances. Mr. Geithner warned that the EU crisis was a “CATASTROPHIC RISK TO FINANCIAL MARKETS.” He advised that the conflict between European governments and its central bank must end.

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Notes From Underground: Marco Polo returns to Italy, Bringing Chinese Riches

September 12, 2011

Well, the media was running wild in the last hour of U.S. equity trading with a rumor of the Chinese offering to purchase Italian bondsx. Every time the Euro debt crisis comes to a full boil, rumors arise about the Chinese riding to the rescue and buying beleaguered sovereign debt. In December 2009, the rumors were that the Chinese Investment Corporation [CIC] was interested in acquiring the 25 billion euros of Greek debt that was being road-showed–that was prior to the Greek Debt Crisis and the expected rate was roughly 6.5%.

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Notes From Underground: Canada’s government is a fallen angel while Merkel’s CDU suffers a severe setback

March 27, 2011

The weekend news was not economic but political as governments all over the globe suffered major setbacks. The Liberals secured a “NO CONFIDENCE” vote in the Canadian Parliament and bring down the Harper Government. I know that Michael Ignatieff will claim that he is perserving the democratic basis of Canada as the ruling party was brought down on an issue of CONTEMPT. The only thing that appears contemptuous is the ego of Ignatieff. He claims that the TORIES are out of touch and out of control. The election is called for May 2 and then the electors will have the final say on who is out of touch. This will be the fourth general election in seven years and let’s hope the citizens of Canada show their anger and elect an outright majority so Canada can get on governing itself.

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Notes From Underground: DOES DOMESTIC POLITICS TRUMP ALLEGIANCE TO LARGER POLITICAL ENTITIES?

March 24, 2011

It seems that overnight many traders were selling the EURO because of news that the Portuguese Government was to fall. As I have written about this before, it is certainly no surprise. The only surprise was its timing as it comes as the “RUBBER STAMP SUMMIT” is taking place today and tomorrow. Also, the credit rating agencies downgraded many Spanish Banks, making the EU SUMMIT that much more volatile. Throw in the French anger toward the Germans regarding its Libyan decision and the mood in Europe continues to darken.

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Notes From Underground: Last Week Was The Year That Was

March 20, 2011

This weekend brought mixed news about the lessening of RISK in Japan, and possibly Bahrain, while increasing the sense of risk in Libya and other parts of the Middle East. It appears that the threat of nuclear catastrophe has been diminished as some power has been restored to the nuclear plants under stress and the needed cooling is proceeding. The Japanese equity market will be a good source to monitor investor sentiment as weekend news publications were filled with articles about the values abound in the Nikkei and other Japan-based indexes. The YEN will be a much more difficult barometer because of the impact of YEAR END and its ability to cause disruptive volatility in currency markets.

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