Notes From Underground: Employment numbers were robust … YADA YADA YADA

Both Canada and the U.S. reported strong job numbers and the market paid heed for a very short period of time. We are focused on credit for that is where the markets are focused. The global markets are enamored with the possibility of combined action by the G7 members, especially with the ECB leading the way by providing a massive dose of short-term liquidity to remove the pressure on the LIBOR rate–European Banks are having funding problems on the overnight markets.

The equities and all risk-based trades are bouncing around as rumors arise about the potential liquidity package being approved. When Obama said he had been in contact with German Chancellor Angela Merkel, the S&Ps immediately went bid but that rally lasted for a very short period. The Japanese gave the rumors some substance when it added ¥2 trillion ($22 billion) into the financial markets last night. We warned last night that Japan is very uncomfortable with YEN strength as the country battles deflation.

The markets will remain on edge as the financial system wonders about the presence of ECB liquidity providers and on this side of the pond we are curious as to the whereabouts of Larry Summers and  Tim Geithner. Adding to the uncertainty is the statement made by Merkel, as reported by Bloomberg News:

“In some ways,it’s a battle of the politicians against the markets”and “I’m determinedto win. The speculators are our adversaries. That’s why we have to weigh our words more carefully than everand stand united.”

Herein lies the problem: When the markets are supportive of the political elites, they are noble and honorable but when the markets act to reveal the absurdity of some policies, it is always wanton and irresponsible speculators. The Eurocrats’ obstinacy and the markets are on a collision course. Historically, the markets have held the upper hand except in repressive, autocratic states. The markets cannot afford the luxury of not hearing and therein lies the rub.

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5 Responses to “Notes From Underground: Employment numbers were robust … YADA YADA YADA”

  1. spdbrnr34 Says:

    QE just forestalls the inevitable and is a losing battle in the end to mother nature…and makes the blow up all the uglier…I think we’re entering stage 2 of this mess where Sept 08 was stage 1.

    Gold up $20 yesterday – very telling.

  2. yra Says:

    no question fo rthe GOLD but they need to stall the collapse–as the world is so fragile—remember the G20 said after the Pittsburgh meeting—-job well down

  3. Anon Says:

    I also do think it is a fight between **some** politicians and the markets, the aim is to put markets under control the best as possible and I do agree absolutely. For the rest am in complete discordance with what you say…

    It is **not at all** that market “judge” of the good or bad policy in this or that nation, markets are ***totally*** unresponsible, a market is a sell and a mercantile relation by actors that never meet… They are absolutely unjudged…, and unjudgeable, never elected…

    I am against the dictatorship of markets even if these ideas are not liked today
    Are these ideas heretic… Ok all the same…

    The problem is **not that politicians need to do it, they are bound for their consensus is waning, they do it for their own survival, the problem is if they are capable of doing it…

    I do not think they may own the authority to do it…

    And this is the point, **not markets ““““““““““““freedom”””””””””””” but their control…
    Ah, markets are **not free…
    Ah, Banks gave what they **never owned…
    Banks loaned what they never owned…
    And this is the source of the system called Capital-ism from the beginning, and this system, this very system is under threat… Understand?
    Good to be remembered, and said… Finally said! Of course am sure you do not understand and perhaps it is impossible for you even to conceive it…
    But markets will be put under a certain control, that you like it or not…

    P.S. A Warm And Gentle Advice. Take **all** the neoliberistic “ideas” and throw them away from the window, not only they put us where we are but they do not **practically** serve us… They do not “grasp” the situation…

  4. DigDouggler Says:

    A government complaining about speculators sounds exactly like a CEO complaining about short sellers.

  5. brendo Says:

    Love the blog….Wow….
    I’m always reminded of what jim rogers said “whenever governements say they are going to intervene in something…do the opposite, its inevitable”

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