Archive for the ‘2012 Election’ Category

Notes From Underground: Erskine Bowles For U.S. Treasury Secretary = A Big Stock Market Rally

November 15, 2012

The election is over. It’s time for leadership and decisive action. Yes, there are winners and losers and promises to be kept. Six billion dollars was spent on elections in total and the money given to support candidates is not charity but an effort to purchase some modicum of influence. No problem with that for that has been the game since the birth of the republic and long before that in other political entities. If the “fiscal cliff” and its potential impact is as serious as some opine then leadership is needed to set the course of real action. President Obama, if you believe that the fiscal crisis is the most urgent problem, you will choose Erskine Bowles as your Secretary of Treasury because he has the ability to reach across party lines and get to rational levels of compromise. Mr. Bowles has the respect of party leaders and, most importantly, his plainspokenness is needed to get the American people to understand the rudiments of the looming financial debacle.

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Notes From Underground: Will Parliament’s Dissolution Become the Beginning of the Solution?

November 14, 2012

Last night , Prime Minister Noda decided to call for new elections in Japan and that automatically ends this session of the DIET. The elections will take place in a month and the present unpopularity of the DPJ means that the LDP is the favorite. It seems that Noda was willing to call elections on the promise that the new parliament would work toward some type of election reform. Hopefully some of the readers of NFU will help fill in the specifics about the issues of election reform. The YEN was sold off on the news of Parliament’s dissolution because the present strength of the YEN and its negative impact on Japanese manufacturing is certain to be an issue. The LDP’s leader, Shinzo Abe, has been very vocal about the BOJ/MOF doing more to raise inflation in the Japanese economy and to be more aggressive in efforts to weaken the YEN. While the YEN weakened, the NIKKEI index held its overnight gains even as the S&Ps, DOW and NASDAQ were knocked lower following President Obama’s press conference.

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Notes From Underground: A Response To The Berkshire Boys (Putting Contemporary Civilization Into The Barbarous Relic)

May 7, 2012

Quick Hitter: The financial markets steadied themselves today after the initial “shock” of yesterday’s European elections. The EUROPEAN DEBT MARKETS showed resolve as both the BTPs and OAT futures performed better than the BUNDS and the EURO rallied back to almost unchanged as the market awaits the discussions between Merkel and Hollande, as well as further word about attempts to create a working government in Greece. At the end of the day, a crisis was averted but as all our readers know Spain, Portugal, Ireland and Italy are all still on the boil. So, while the heat was turned down NOTHING HAS REALLY CHANGED … so it goes.

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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: No Box Can Contain These Thoughts

April 30, 2012
First let’s dispense with the market data:
1. Tonight at 11:30 p.m. CST the RBA will announce its interest rate decision. The market consensus is for a rate CUT of 25 BASIS POINTS  from 4% from 4.25%. There are a few analysts looking for a 1/2% CUT and from looking at the near term curve inversion that is not a far-fetched concept. The overnight/2-year curve is inverted by 125 BASIS POINTS so a larger cut would help correct this inversion. (Not a bad idea for an economy that is slowing and the Aussie Treasurer has made known his desire for raising taxes to help repair the BUDGET DEFICIT that has arisen during the last four years. An anticipated 25 basis point cut be market neutral while a 50 basis point cut would lead to an immediate selloff of the Aussie dollar. More important will be the RBA‘s STATEMENT as our readers know that Governor Stevens is a very astute analyst of the GLOBAL ECONOMY, so listen for any mention of an AUSSIE FEAR OF A SLOWDOWN IN CHINA.
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Notes From Underground: If You Go Chasing Rabbits

April 23, 2012
One Pill Makes You Larger
And One Pill Makes You Small
And the ones that mother gives you
Don’t do anything at all
Go ask Alice
When She’s Ten Feet Tall
                                –Jefferson Airplane
Nothing like spending four days in Berkley to see the world as allegory
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Notes From Underground: Let’s Assume We Have A Can Opener…

April 15, 2012

As regular readers of NOTES are well aware, I have been very critical of market participants like George Soros and their sanguine views of the European DEBT CRISIS. Many analysts like Jim Cramer have spent the last years waving the debt problem away. First, it was Greece was too small to have an impact on Europe. Ireland was too small and besides was ring-fenced by a bad bank structure. Portugal was smaller than Greece, thus nothing to be concerned about. Italy and Spain were possible problems but many were listening to the flirtations of the Chinese, who, time after time, made solicitations about purchasing European Debt. (By the way, we still haven’t seen the Chinese Sovereign Wealth Fund enter the fray.) If all else failed, European financial leaders were too exposed to the EURO to allow the European Monetary Structure to collapse. Germany would not allow the work of Helmut Kohl and others to be just another failed attempt at a unified Europe.

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Notes From Underground: The Meaninglessness of IOWA and Other Thoughts

January 4, 2012

While the mainstream media desires to fill time it seems that Iowa has become less important this year as a barometer of the national mood. The agrarian sector of the economy is very healthy and with their stomachs full, the people of Iowa can ponder and think and be much more philosophical in terms of candidate selection. Rick Santorum can play to the high-mindedness of the social conservative agenda because in Iowa those voters have two loaves of bread under each arm. It is much tougher to be concerned about the ideological nature of life when you are fighting in a line to pick up an unemployment check or applying for a job.

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