Posts Tagged ‘Martin Wolf’

Notes From Underground: Martin Wolf/Mr. Fantasy Lays Out The Road For Germany To Exit The EU

May 10, 2016

In tomorrow’s Financial Times, one of the major sycophants of ECB and Brussels policy has raised his “voice” in castigating the Germans for being the source of all the EU’s current problems. Martin Wolf’s op-ed piece, “Germany is the Eurozone’s Biggest Problem,” is a criticism of the German export engine. And it seems to be another source for what appears to be a concerted effort to challenge Berlin’s intransigence over the need for budget austerity before fiscal stimulus. Wolf’s opening salvo against the Germans: “The financial crisis has given it a dominant voice in eurozone affairs. This is a matter of might, not right. Creditor’s interests are important. But they are partial, not general interests.”

My response to this is that Mr. Wolf sets up a straw man with this argument. The Germans MIGHT have evolved because without them GUARANTEEING the promises of President Draghi’s “whatever it takes” campaign to maintain the existence of the EURO, the entire EU project would have collapsed under the weight of its highly questionable ability to honor the debt of what at the time was referred to as the PIIGS: Portugal, Italy, Ireland, Greece, Spain.

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Notes From Underground: Examining the Theoretical Premise of Notes From Underground

March 6, 2012

ABSTRACT: A theoretical view of NOTES FROM UNDERGROUND is that the initial action of a flattening yield curve is BULLISH, or, most importantly, not BEARISH for a developed market currency for it signifies that a CENTRAL BANK is ahead of the inflation curve and thus, is given confidence by BOND BUYERS. The corollary to this premise is that flattening curves and certainly inverted curves are a BEARISH INDICATOR FOR EQUITY MARKETS. In a RISK ON/RISK OFF algo environment, the market continually reflects this, especially as we saw today. However, day-to-day trading strategies are certainly not the major test of the theory. A reader of the BLOG commented on Sunday’s post that the opposite view was what he believed. Again, theories are to be tested for trading like good science “ADVANCES ONE FUNERAL AT A TIME.” (Max Planck).

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Notes From Underground: Slow news weekend = no stress ’til next weekend

July 18, 2010

There has been very little news this weekend in regards to the financial markets. Reuters reported that the IMF will delay aid to Hungary as the new government is perceived as dragging its feet in installing the fiscal reforms that are needed to meet IMF demands. We don’t think this is a major event yet, as the Hungarians are trying to buy some time for domestic political reasons and the situation is not dire at this time. Also, the IMF has requested another $250 billion in additional commitments in order to boost its lending resources to $1 trillion. IMF officials want to build a larger safety net so it’s prepared to help head off future global crises.

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Notes From Underground: Tomorrow the FOMC–extended period expected to stay

June 22, 2010

The FOMC statement will be released Wednesday and it will reinforce the discussion about the uncertainty of deflation/inflation. Bernanke and his fellow output gappers will stay the course as long as unemployment stays too high to comfort the Washington politicos. As we head into the Toronto G-7 and G-20 photo ops this weekend, the FED will not wish to create any type of uncertainty into what will prove to be a raucous weekend.

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Notes From Underground: European Financial Stability Facility is born in an effort to relieve European labor pains

June 8, 2010

The new Special Purpose Vehicle (EFSF) was explained in greater detail today but is still not totally clear as to its operation. What we do know is that the EFSF will be able to lend to troubled nations at a much better rate then the stressed debtor would be able to borrow on its own. The facility will be backed by the pro-rata guarantees in reference to its capital base and weighting in the ECB. By clubbing together, the Europeans will be able to issue joint bonds backed by lots of collateral, thus giving credibility to the EFSF. It is believed that the EFSF will be AAA-rated because of the underlying soundness of the non-profligate. Also, the fund can only be tapped by  the nation in stress after it has agreed to substantial changes in their economy in order to correct the imbalances.

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