In the first post about the YEN/YUAN, we discussed the current significance of the cross, and with it a rising dollar. Now we will provide CONTEXT and NUANCE as to the backdrop of this cross’s significance. It is easy to forget that the Chinese economic miracle is only 40 years old as it began under the direction of DENG in 1978-79 and his rise as China’s leader. By 1994 China is beginning to feel the positive effects of Deng’s policies of white cat/black cat in pursuing modernity and western-style economic growth.
Archive for the ‘Japan’ Category
Notes From Underground: Into the Weeds on Yen/Yuan
April 28, 2022Notes From Underground: An Open Letter To the G-7
June 2, 2021Every G-7 or G-20 meeting homage is paid to the idea of free markets via the market driven value of each nation’s currency. This is hogwash of the highest order in the world of central bank asset purchase programs. The clarion call is that QE is a domestic-based program meant to meet the inflation target set by the nation’s policy makers and any impact on a nation’s currency is just unintended consequences of keeping a country out of a potential disinflationary cycle. Every central bank statement except the U.S. has a sentence or two about the relative value of a nation’s currency and if too strong then concern about a strong currency being a headwind in meeting the illusion and capriciousness of that 2% inflation target.
Notes From Underground: Hello, 2019
January 6, 2019“I am a sick man. I am a wicked man.”
So opens the Dostoyevsky novella Notes from Underground. Sometimes I seem to be caught in a similar existential trap as I analyze the global macro data and fundamentals. I am sick because I continue to pursue the opportunities that explode before me. I have taken a turn for the worse and become sick because of the constant flow of manipulated headlines crafted to purposely activate the trading algorithms. Tweets and headlines with no context have become the coin of the realm, especially for high frequency trading operations. But their role in the market jungle does little to dissuade me from honing my craft. The bottom line: Greater preparation and more patience is needed.
Notes From Underground: A Conversation With Bonugli and Ronni Stoeferle
June 10, 2018On June 6, I had a discussion with the Financial Repression Authority host Richard Bonugli and the highly respected Ronni Stoeferle. We covered myriad of global financial and political concerns as we tried to provide the foundation for profitable opportunities via in-depth analysis of these fragilities.
Notes From Underground: This Is A Week Filled With …
January 29, 2018This week for global macro traders is packed with data and policy statements that can ignite the volatility fuse. On Tuesday night, President Trump, the conquering hero of Davos, will deliver the State of the Union address. Chair Janet Yellen will oversee her final FOMC meeting this week. There are also several data releases Thursday and Friday, culminating with the unemployment report.
Notes From Underground: Some Issues to Contemplate
January 16, 2018On Tuesday, Rick Santelli and I spoke, and, as usual it was way too short as we couldn’t cover anything in the depth we would’ve liked. Regardless, it allows us to get out front of many investment ideas. Rick has a stable of high quality guests: Bianco, Boockvar, Biderman, Trichet, Lazear … the list goes on and sometimes I wish my readers would let CNBC know how important Rick is for a larger discussion about ideas besides the most recent Apple price and latest Trump tweets.
Click on the image to watch me and Rick discuss the euro and the central banks.
Notes From Underground: Prepping For Draghi
October 23, 2017Another moment in time with Rick Santelli. We reviewed some of today’s early market reactions to the weekend events. A measure of the impact of President Mario Draghi’s ECB policy was reflected in the prices of European sovereign debt. The political news out of Spain and Italy let alone recent elections in Austria and the Czech Republic SHOULD have sent Italian and Spanish yields HIGHER but because of the ECB’s ongoing LARGE ASSET PURCHASES Spanish and Italian yields on 10-year debt actually dropped the most today.
(Click on the image to watch me and Rick discuss the weekend’s events.)
Notes From Underground: Elections In Japan, Czech Republic and Italy
October 22, 2017First: On Oct. 18 I talked with Richard Bonugli from the Financial Repression Authority and financial analyst John Browne, a former member of the British Parliament. I am linking to the transcript of the chat. The conversation was free-flowing and was heavily tilted toward geopolitical concerns and shed light on investment possibilities. But as readers of NOTES well know, many of out best trade outcomes are based on political economy as well as mere yield curves. Last week the 2/10 did challenge the 73.5 basis point level (again) and by Friday the 2/10 had bounced back to 81 basis points.
Notes From Underground: Will Trump Hustle Abe and Ask for 10 Shots?
February 9, 2017The main story for the next two days will be Japanese Prime Minister Abe’s visit to the U.S. to meet with President Trump. Abe is coming to mend relations after Trump officially ended the Trans Pacific Partnership (TPP) agreement before Congress could even debate the trade treaty. The Japanese prime minister had expended a great deal of political capital in Japan to get various parties to accept a massive Pacific-based trade agreement. In an effort to forestall any discussion of Japan as a currency manipulator, the Japanese are offering all sorts of investment ideas in the context of getting Trump the negotiator to soften his stance on tariffs for Japanese goods, or sourced material from Asia for assembly in the U.S. Japan is a paramount promoter of the global supply chain paradigm.
Notes From Underground: Another FRA Podcast
January 29, 2017Tonight I am posting the latest episode from the Financial Repression Authority (click on the blue link to listen). I do these for no remuneration as I think the information flowing out of this group creates great conversation and can generate some very profitable investment opportunities. Yes, it’s 34 minutes long but it is more LEARNATIVE than the network news. So pour a stiff whisky and listen while doing other reading. I share this with, you readers because I am honored to be a part of this great dialectical process. One of the key points in tonight’s post is the development of a narrative in which to analyze the world of Trump. It is not a partisan narrative but one I am developing as I attempt to discern the unfolding global dialogue being put forward by Team Trump.