Archive for the ‘China’ Category

Notes From Underground: The Arrogance of Janet Yellen

April 8, 2021

Since I last wrote, it has been a time for thought, contemplation and discussion. This week I recorded an FRA podcast with Richard Bonugli and Larry McDonald. It was the equivalent of the “Wide World of Sports” as we traveled around the world looking at profitable investment ideas. Enjoy the best 60 minutes in financial global macro analysis.

Click here to listen to the podcast.

(more…)

Notes From Underground: Was It the Fool On the Hill?

February 23, 2021

On Tuesday, Federal Reserve Chairman Jerome Powell testified before the Senate Finance Committee in the semi-annual Humphrey-Hawkins Testimony and Report to Congress, in which the Fed has to answer as to how the U.S. economy is performing in relation to its dual mandate. Senator Sherrod Brown, the chair of the finance committee, is very knowledgeable and in similar fashion provided strong leadership but unfortunately he cannot censor stupid questions as politicians use the microphone for political posturing. There were many types of “when did you stop beating your wife” questions as if the Senators wished to trap Powell instead of an honest assessment.

(more…)

Notes From Underground: Central Bank Poker

January 21, 2021

This week, three G-7 central banks had meetings and all decided to CHECK and leave policy unchanged. This was widely expected as there was little reason to UPSET the incoming Biden administration with any idea of currency manipulation. However, the Bank of Canada, Bank of Japan and European Central Bank all discussed the fear of a further slowdown from an increased spread of covid-19.

(more…)

Notes From Underground: Coronavirus Trumps Unemployment Data

February 9, 2020

Friday’s unemployment report was firm on job creation but soft on average hourly earnings. The work week remained unchanged. Further north, the Canadian jobs report was very robust as jobs increased by 34,500 versus an expected 16,000. The real strength was that all the jobs growth was full-time with hours worked experiencing a healthy gain of 0.5%. The unemployment rate dropped from 5.6% to 5.5%. And yet the Canadian dollar could not sustain a rally for more than five minutes.

(more…)

Notes From Underground: Man Plans, God Laughs

February 2, 2020

It has been three weeks since I have sat down to articulate my thoughts on the global macro financial system in an effort to profit from trade/investment potentials. A lot of the discourse with many readers the focus was on the situation in the Middle East.

(more…)

Notes From Underground: If You Don’t 2+2=5, Then Read No Further

August 6, 2019

The tagline of this blog has always been “where 2+2=5 is also a wonderful thing.” If you believe that the world is balanced and rational in all things financial then this BLOG is not for you. Unlike Fyodor Dostoyevsky’s character, I am not a sick man, nor a spiteful man. I use my deep knowledge of political and economic history to analyze financial markets from myriad angles. This allows for a belief that context is supreme. In this context I posit that President Trump’s decision Monday to name China a “currency manipulator” is a way out for the U.S. from the dissension that has arisen within Trump’s team of advisers as reported over the weekend. If Bob Lighthizer was opposed then indeed President Trump is in a more difficult position than previously thought.

(more…)

Notes From Underground: When a Slower Fool, Always Look on the Bright Side of Life

June 30, 2019

First things first: There were no surprises out of the G-20, at least for those who read Notes From Underground and listened to the discussion that took place in the Whitewave Trading room. The most significant outcome was that President Trump held off from installing additional tariffs while President Xi confirmed that China would be buying more U.S. production, especially in the agricultural sector. In Thursday’s podcast with the Whitewave participants I advised that with the current weather problems in the U.S. heartland the Chinese would have to be vigilant about the cost of global grain prices rising as supply was hampered by poor planting conditions.

(more…)

Notes From Underground: Making Sense Of the Jabberwocky

May 7, 2019

Fans of Lewis Carroll should know the whimsical poem from Alice in Wonderland that comes across as complete NONSENSE. The collection of tweets from the White House is the modern day version of the Jabberwocky. On Friday Trump tweeted about how well the talks were going with Chinese and that they were close to completion with a positive outcome. So between that and a strong jobs number, the U.S. equity markets had much to celebrate

(more…)

Notes From Underground: Did Xi Just Provide a Clue to China’s Yellow Brick Road?

April 28, 2019

In the past week, we have heard from the Bank of Canada and Bank of Japan. There were no surprises as both institutions noted softness in the global economy. The BOC, as reported by Bloomberg, “fully abandoned its bias toward raising interest rates at the economy grapples with a slowdown.” The BOC overnight rate remains at 1.75 percent, which is deemed appropriate by the Governing Council until the global economy removes some of the uncertainties it is struggling to overcome.

(more…)

Notes From Underground: Lighthizer, Always At the Ramparts Of Trade Battles

April 8, 2019

As the second quarter begins, the financial markets seem fixated on China/U.S. trade frictions, or lack thereof. This narrative is old and stale. For those new to the realm of international relations, be aware that China will slow-walk these negotiations. There will be many attempts to “agree to disagree.” For example, in Monday morning’s SOUTH CHINA MORNING POST, there was an article titled, “China Refuses to Give Up ‘Developing Country’ Status At WTO Despite US Demands,” about China’s “privileged position” at the World Trade Organization. In the simplest terms, the WTO allows for countries to self-define as developing country status. This brings certain rights that allow for longer transition periods before they have to be in full compliance with WTO rules and regulations. This is described as “Special and Differential Treatment.”

(more…)