Archive for the ‘ECB’ Category

Notes From Underground: Policy Trumps Data

June 6, 2020

The MISS by the economic analysts of Friday’s unemployment data has rendered all data as tertiary relative to the policy that has been enacted to counteract the malicious effects of the Covid-19 shutdown. Global stock markets have rallied as if normalization has occurred and UNEMPLOYMENT has returned to its historic lows of 3.5%.

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Notes From Underground: Central Bank Policy Peeks

June 2, 2020

On Monday night, the Reserve Bank of Australia issued its policy decision and as expected, there was no change in overnight rates at 0.25%. More importantly, the RBA is targeting three-year Aussie government bonds at 0.25%, keeping the yield curve flat or inverted out to that point.

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Notes From Underground: Courting Disaster

May 10, 2020

Friday’s unemployment report was as bad as forecast and probably worse. Yes, the unemployment rate was not as high as suspected but once the data was analyzed it appears the actual number was close to 20%. The most problematic data point going forward is the AVERAGE HOURLY EARNINGS (AHE). The jobs report revealed a historic 4.7% monthly increase but this was for the worst reason.

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Notes From Underground: May Day or Mayday Mayday Mayday?

May 3, 2020

On Friday the world “celebrated” May Day, when the red flags of the world’s workers united in solidarity are traditionally unfurled. The fall of the Berlin Wall unleashed the rush for economic development and a plethora of workers in search of capital to lift its productivity. And for the past 30 years have capital and wages have been elevated for the emerging economies yet stagnant for the developed region. It has been capital that has been the recipient of increased profits as global capital went to the lowest wage regions.

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Notes From Underground: Merkel Doesn’t Approve of Macron’s Package

April 23, 2020

It seems this would be a good headline for the New York tabloids if any mainstream U.S. media outlets actually paid attention to what took place in Europe. Again, EU leaders failed to agree on a large fiscal stimulus backed by a common funding mechanism, or as George Soros and others recommended, a perpetual EUROBOND of at least a TRILLION EUROS or more. The Germans and their running dogs fail to acknowledge that the collapse of the European financial system if the Italians choose the “nuclear option” and say CIAO to the EURO the cost will far exceed any amount being discussed.

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Notes From Underground: From Bully Pulpit to Blabbermouth

April 21, 2020

ATTENTION: What you are about to read IS NOT A POLITICAL STATEMENT for I don’t care about your politics and you shouldn’t even know mine. The OVAL OFFICE provides the U.S. president a pulpit in which to amplify his/her voice in a an effort to tip the policy debates in their favor. But one a policy is ill advised from a trade/financial perspective and we will shout it from NOTES FROM UNDERGROUND.

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Notes From Underground: The G-7 Meet on Tuesday

April 13, 2020

On Monday, Treasury Secretary Mnuchin said the G-7 will be holding a video conference Tuesday, which will include all the central bankers. What is on the agenda? It has not been announced so we are left to GUESSING. The Swap LINES have been opened, massive asset purchase programs are in place, new facilities have been created and fiscal stimulus is raining down in all the old familiar places. The OIL agreement is in place and the FED has even embarked on a program of exchanging CASH for high yield bond ETFs in an effort to prevent a continued negative feedback loop in corporate debt markets. What is there for the G-7 to discuss?

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Notes From Underground: What Does Friday’s Unemployment Mean, Mr. Natural?

April 2, 2020

IT DON’T MEAN SHIIIIITTTTT.

Let’s put aisde all the nonsense. But I will offer this: The average hourly earnings are going to begin to take on increased significance as the energy sector begins a massive shedding of HIGH PRICED jobs. Also, many other high priced employees are going to be losing work so the data is going to reflect a hit to consumers not only through the loss of jobs but from the destruction of HOURS WORKED by high income earners.

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Notes From Underground: And So It Goes

March 26, 2020

Everything we’ve discussed at NOTES FROM UNDERGROUND has come to fruition in a very real time. This is not predicting year-end levels or quarter-end levels but very critical calls in real time. My inbox has been inundated with pieces from analysts well after the fact. Last Thursday. I warned about the need to weaken the DOLLAR. Any reader long dollars is desirous of losing money.

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Notes From Underground: Three Cheers for Christine Lagarde

March 19, 2020

While the rate cutters were busy dumping on ECB President Christine Lagarde for not cutting and only announcing an increase in bond purchases I opined that Lagarde was getting more by doing less. Lagarde did not go down the Draghi route and lock up with Jens Weidmann and the Fiscal Austerians in the Hanseatic League. The ECB president played for a bigger prize and tonight she delivered with an announced 750 billion euro bond buying program of both public and private issues.

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