Archive for the ‘SNB’ Category

Notes From Underground: Myopic Gibberish

May 12, 2020

The Tweeter-in-Chief on Tuesday was pushing on a string as he called for NEGATIVE INTEREST RATES (again). The Federal Reserve is also debating in public the idea of negative interest rates and seemed to believe there are better tools to be utilizing than rates below zero.

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Notes From Underground: SNB, Paradigm or Pariah?

May 4, 2020

Question: Why does the Swiss National Bank become an important topic for discussion?

Answer: Since Mario Draghi’s “whatever it takes” and “no taboos” comments in 2012 about saving the euro. The SNB has been in a defensive position of trying to prevent a dramatic appreciation of the FRANC as the SWISS acts as a haven for Europeans. The geographic location provides for what economists refer to as home basis.

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Notes From Underground: Into the Dark Recesses of My Mind

March 3, 2020

Three weeks ago we at NOTES FROM UNDERGROUND suggested the Fed needed to cut interest rates by 50 basis points in an effort to get ahead of the potential negative economic fallout from a DEMAND SHOCK caused by the Covid-19 virus. But the rate cut was to be presented with the caveat that this was an economic cut and financial considerations were not involved. If the demand shock from the VIRUS never materialized the cut would be RESCINDED. After announcing an emergency cut Tuesday Chairman Jerome Powell took a few questions from the media.

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Notes From Underground: A New Form of Asian Contagion

February 23, 2020

On July 2, 1997 the Thai baht entered crisis mode, kicking off what become known as 18 months of Asian Contagion. The so-called Asian Tigers experienced massive capital disruptions as the Chinese economic miracle undermined the capital expenditure projects that were creating the manufacturing capacity to lift the TIGERS out of poverty and into significance in the global supply chain. The emerging markets learned that as fast as capital flows in to support foreign direct investment it can hurriedly depart as it seeks alternative venues with a better competitive advantage .

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Notes From Underground: “It’s Good News Week”

December 10, 2019

What an appropriate song for the band Hedgehoppers Anonymous. This week is loaded with potential market-moving outcomes. On Wednesday we have the final FOMC statement of the year followed by Chairman Jerome Powell’s press conference. The CONSENSUS is for no change in the current fed funds target range of 1.5% to 1.75%. The real key will hopefully be Powell’s press conference as market participants are hoping for any sort of dialogue about the Fed’s role in the repo market.

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Notes From Underground: Trump Has Weaponized The Dollar. Do the Longs Know?

June 12, 2019

Some shots were fired last Friday, but it seems that the markets can only hear the siren song of White House tweets. There was an important story from Bloomberg reporter Saleha Mohsin titled, “Trump’s Currency War Plan Puts Treasury and Commerce at Odds.” The article noted that “a Commerce Department proposal to impose countervailing tariffs on countries that it determines have devalued their currencies has alarmed officials at the Treasury Department.”

It appears that President Trump has grown frustrated by Treasury’s failure to name any country as a “currency manipulator.” It has been Treasury’s bailiwick to monitor the foreign exchange interventions of countries who strive to artificially hold down the value of their currencies in an effort gain a competitive advantage versus any G20 country, especially the U.S. (from the Treasury Department perspective).

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Notes From Underground: A Podcast With Ronald-Peter Stoeferle

January 8, 2019

A couple of weeks ago I had the pleasure of recording a Financial Repression Authority (FRA) podcast–hosted by Richard Bonugli–with one of the world’s foremost Austrian economic analysts, Ronald-Peter Stoeferle. Mr. Stoeferle had just returned from a GOLD conference in China so he was bringing a fresh perspective on the global demand for precious metals. This podcast provides the view from Asia, a region from which we don’t receive enough information. Enjoy and I will return in full next week.

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Notes From Underground: Narrow-Minded Hypocrites, All I Want Is the Truth

December 13, 2018

Gimme some truth. That is what John Lennon craved back in 1971. In 2018, it seems that investors and traders crave the same thing:

       I’m sick and tired of hearing things
       From uptight, short-sighted,narrow-minded hypocrits
       All I want is the truth, just Give me some truth
       I’ve had enough of reading things
       By neurotic, psychotic, pig-headed politicians
       No short-haired, yellow-bellied, son of tricky dicky
       Is going to mother hubbard soft soap me
       With a pocketful of hope
       Money for dope, money for rope

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Notes From Underground: Another FRA Podcast

September 30, 2018

I am posting the latest PODCAST from the Financial Repression Authority (FRA), in which Peter Boockvar and I talk markets with Richard Bonugli. This PODCAST sets out the market issues that financial markets will confront in the fourth quarter.

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Notes From Underground: Is April The Cruelest Month?

April 29, 2018

As T.S. Eliot warned in The Wasteland, April is the cruelest month, as the thaw of winter gives way to hope as the world returns to rejuvenation. April has delivered the first quarter corporate results and it is no exaggeration to state that revenue and earnings have exceeded expectations. However, the equity market results have failed to respond to the robust numbers as the SPOOS have gained a mere 1.25% and remain unchanged on the year. The NASDAQ 100  has been a much better performer as the TECH sector continues to cruise.

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