Archive for the ‘Gold’ Category

Notes From Underground: Not Such Benign Neglect for the Payrolls Report

December 9, 2018

In what appeared to be a “soft” unemployment report, the equity markets discarded the  traditional Goldilocks response to weaker data and spent the entire session in sell mode. That sent the S&Ps to a 4.5% LOSS for the week. The BULLS are in trouble for the market rejected what was regarded as POSITIVE news and continued the 11-week long correction. The G-20, “dovish” FED and softer data were cast aside as new negative stories, like the arrest of a significant Chinese business leader and the Mueller investigation closing in on the president. OPEC’s agreed cut in oil production sent crude oil prices moderately higher on Friday, which would have given a boost to the S&Ps as energy stocks would have been bid in past occasions.

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Notes From Underground: Podcast? Yes, Podcast

November 20, 2018
It was a pleasure to spend time with Peter Boockvar, David Rosenberg and Richard Bonugli as we prepared a Thanksgiving feast for the global macro world. We cover many relevant areas and provide measured analysis of important financial concerns. Pour your favorite libation and take a listen as you sift through the cornucopia of ideas and develop possible profitable trades.

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Notes From Underground: Headlines Drive the Algos and the Circle Remains Unbroken

June 12, 2018

I’m going to be off for a few days, even if this Fed meeting proves to be the most market-moving week in many years.

The news from North Korea proves to be a non-event (as suspected). On Wednesday, we get the FOMC statement, which OUGHT to meet market expectations with a 25 basis point increase and some sense of the interest on excess reserve (IOER) rate in reference to fed funds. There is much discussion about the FED reaching “normal” interest rates, meaning neither too weak nor too strong to reach its dual mandate.

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Notes From Underground: The Importance of Being Lighthizer

May 24, 2018

The plot thickens as the media is filled with one leak after another in regards to tariffs or threats to embark on a road to perfidy by invoking section 232 of the 1962 Trade Act: Using the broad cover of national security to justify increased import duties on autos. [In a hat tip to A. Limey] It is time to acknowledge that the “brain” of President Trump’s trade team is Robert Lighthizer.

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Notes From Underground: The Chinese Cite Hyman Minsky

October 19, 2017

First a few jokes: My sources tell me that the new Fed Chairman will be Marc Faber; second, as Lloyd Blankfein is chirping about Brexit and Goldman moving to Frankfurt, Germany, he opined several years ago that Goldman was doing God’s work. Well, being the cyclical time in the Jewish Torah of the reading of NOAH, I remind Blankfein that Noah was also part of God’s work. (Pour a scotch and laugh).

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Notes From Underground: The Unemployment Data? I Suppose It’s Meaningless

August 31, 2017

It’s the first Friday of the month so that means we will have the jobs report at 7:30 CDT and 7:29:59 if you are a high frequency trading operation you do the math. Consensus is for 180,000 non-farm payrolls and the overall rate remaining unchanged at 4.3%. The most important piece is the average hourly earnings (AHE), which is predicted to be 0.2% which is lower than the July data. Regardless, with the economic impact from Hurricane Harvey still an unknown the FED will be kept from raising interest rates at its September meeting. But if the AHE is strong the FED may move to commence shrinking its balance sheet because Lael Brainard has already informed us that the FED analysts theorize that QT has far less economic impact then a RISE in the fed funds rate.

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Notes From Underground: Arthur’s Song, Lost Between the Moon and New York City

August 28, 2017

A long-time reader of Notes From Underground posted a comment to a previous post promoting long GOLD/short YEN. When I asked him about this trade he noted the onset of currency wars. There is no question, as I have regularly shown that many foreign central banks’ currency’s strength is a reason to maintain very low interest rates and if in place QE programs. I certainly agree with Arthur about this narrative. But from a relative value perspective the Japanese yen has already benefited from its weakening versus the EURO, Aussie, Kiwi, Canada and Swiss franc.

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Notes From Underground: Can Jackson Hole Foster a “Dynamic Global Economy”?

August 22, 2017

This is the topic of discussion for this week’s meeting in Jackson Hole. For the Federal Reserve system, this is a statement, but I raise it as a question. A long-held theme of this BLOG has been that what the Federal Reserve, ECB, BOJ, BOE and other central banks promote as certainty supported by mathematical models I maintain IS NOT ROCKET SCIENCE.

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Notes From Underground: Putting This Week In Perspective

August 10, 2017

Just when the volatility sellers were heading to the beaches to bask in the glow of easy money comes the tweeter-in-chief to crush the complacency. The airwaves were full opiners who warned of a market that is fully valued.Gundlach and Dalio added their two cents for measure, espousing the need to hold GOLD as a hedge against geopolitical uncertainties. Again, it is not political uncertainty but the malfeasance of central banks that should be the concern of global investors. Deflation is the ingredient for central bank panic. As Peter Boockvar reminded his readers today: Gold is a monetary haven.

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Notes From Underground: Shelter From the Storm

August 9, 2017

Not a word was spoke between us,there was little risk involved
Everything up to that point ,had been left unresolved
Try imagining a place where it’s always safe and warm
Come in, she said, I’ll give you shelter from the storm

When Bob Dylan released this song 42 years ago it was on the album Blood on the Tracks. When the FED embarked on its QE1, QE2 and QE3 it was to respond to the blood coursing through the streets of the U.S. financial system. The U.S. banking system was threatened with insolvency and the FED‘s monetary injections sheltered the banking system from a storm of forced systemic liquidation of assets. QE1 coupled with a questionable TARP program did prevent a systemic liquidation but QE2 and QE3 I always believed were superfluous but in the land of counterfactuals it is an impossible point to prove.

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