Archive for the ‘Switzerland’ Category

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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Notes From Underground: “A Single Spark Can Start A Prairie Fire” (Mao, 1930)

January 11, 2016

You don’t have to be a weather man to know which way the wind is blowing, or so says Bob Dylan. As long as all things are emanating out of China it may be the time to dust off the sayings of Mao for as the talking heads are reminding us daily: “The East Wind Is Prevailing Over the West” in all things financial. THE PROBLEM FOR ME IS I DON’T ACCEPT THAT VIEW AND AM IN THE CAMP OF FORMER DALLAS FED PRESIDENT RICHARD FISHER that all roads lead to the FED and certainly the European Union for providing the tinder for a financial prairie fire. There has been so much volatility during the first six trading days of the year it is difficult to get a handle on what is  algo-driven non-fundamental and what may be the commencement of a change in previous momentum trades. Today I will go through a list of POTENTIAL SPARKS TO IGNITE THE  FLAMES OF A FINANCIAL FIRE so that we can be aware of what constitutes  a genuine change in momentum:

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Notes From Underground: Interest Rates In Limbo (Or, How Low Can You Go)?

January 19, 2015

Today it was the Danish Central Bank that lowered its interest rates in order to prevent the markets from trying to break the Danish KRONER/EURO peg and lowered the overnight rate to NEGATIVE 0.20% from a NEGATIVE 0.005%. It was unusual that the Danish Bank lowered the rate on a Monday rather than the usual Thursday but some analysts of the Nordic banking system believe the Danes may act again this Thursday after the ECB reveals its QE program. NEGATIVE RATES ARE THE NEW NORMAL! Danish banking authorities maintain that the Danes are not under as much stress as the Swiss were because the reserves at the DCB are 13% below the peak of 2012, the height of the EU financial crisis.

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Notes From Underground: December 21 Reissue

January 18, 2015

I am reissuing a piece from December 21, 2014 as a reminder of just where the SNB has invested the assets bought by the massive printing of Swiss francs. The Swiss authorities have created a perpetual money machine that “coined” unlimited amounts of francs and exchanged them for other paper assets. The question remains: Who was willing to buy all those francs that the SNB kept selling into the market (and yet the EUR/CHF remained at the 1.20 floor/ceiling)?

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Notes From Underground: What Has the Swiss Wrought (Or Why 2+2=5 Is the Paradigm of Global Macro)

January 15, 2015

We at Notes From Underground have been pondering the global macro landscape and waiting for the inevitable ECB meeting January 22, and, of course, the Greek elections on Sunday, January 25. While waiting for some sensibility from the EU, the SNB abruptly ended its ridiculous intervention policy, which I have been criticizing for the past 12 months. My readers are well aware–as are followers of Rick Santelli–that I have questioned the wisdom of SNB support of the 1.20 EUR/CHF level.

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Notes From Underground: In a 70th Anniversary Redo, I SAY NUTS to Global Financial Markets

December 21, 2014

First, as the clouds of sadness begin to lift I want to thank all of those who took time to send a note to the blog and to me in emails for the condolences on the passing of my mentor and friend. In a tribute to one of the great traders, the markets provided volatility reminiscent of a 21 gun salute, or maybe just 21% vol levels and a VIX to go with it.

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Notes From Underground: To the Readers of “Notes From Underground”

November 26, 2014

Happy Thanksgiving!

It takes readers to make a successful blog and I have been blessed to have readers who are able to add to the discourse that makes for profitable investments and trades. There is no one source for all the answers and a healthy give and take provides for better strategy. Alternative views sometimes urge caution and better trade selection then a one-sided discussion with myself. Again, my wishes to you for a Happy Thanksgiving. I am going to be on with Rick Santelli on Friday morning to discuss whatever he wishes. Hopefully, we’ll discuss SNB, Draghi and whatever else. If any readers have any burning issues, post them in the comments and hopefully they’ll get covered in a very tight time frame.

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Notes From Underground: Another G-20 Communique … Yada, Yada, Yada

November 16, 2014

The gathering in Brisbane, Australia provided a backdrop for the world’s leaders to reveal their warm and fuzzy sides to the cameras as koalas were distributed for “hugs for the home folk”–see we really care about nature and the environment. As usual, the G-20 meeting ended with the release of a leaders’ communique, which provides areas of future “cooperation” for the global hegemons. The typical areas of concern about the environment and the diminution of fossil fuels are stated, as are areas of concern about the international tax system and globalized funding of terrorism and money laundering.

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Notes From Underground: Let’s Skip to Treasury Secretary Jack Lew

November 12, 2014

It is not often that investors are treated to the wisdom of U.S. Treasury Secretary Jack Lew. I am sure that Mr. Lew is a fine man but he is an example of a political appointment serving in a role beyond his pay grade. If I had a question about my 1040-EZ form I would search him out but on global economics and politics I would hope he wouldn’t answer the phone at 3 a.m. In an well-staged leak of his prepared words to be delivered in Brisbane, Australia at the G-20 conclave this weekend, Secretary Lew warns Europe that it risks suffering a lost decade similar to Japan if it fails to undertake fiscal policies to stimulate growth. In a Financial Times article by Robin Harding, Secretary Lew is quoted at the World Affairs Council in Seattle as saying: “Resolute action by national authorities and other European bodies is needed to reduce the risk that the region could fall into a deeper slump. The world cannot afford a European lost decade.” Mr. Lew suggests the usual actions of monetary, fiscal and structural efforts to lift growth or what has become known as Abenomics three arrows.

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Notes From Underground: The Roar From Yellen Quieted the Bloviators

February 11, 2014

The talking heads of financial visual media tried to create a circus around the new Fed Chair Yellen’s first official Congressional testimony. Yellen proved a worthy animal trainer and backed critics and supporters to their corners as she delivered very measured and COGENT responses to her inquisitors. The media was hoping for “red meat” but the Fed chair served up a vegetarian casserole full of nutritional value but nothing for the perpetrators of pabulum to sensationalize. It seems as though Yellen watched tape of Mario Draghi for she knew which Congressional posers needed long, drawn out answers so as devour their allowed five minutes of time. Well done Madam Chairman. This testimony of the Fed Chair, as mandated by Congress, has become about as relevant as the G-7 photo-op. If Congress has questions, put them in writing and establish a record of correspondence and thus a trail of responsibility to satisfy the dual mandate. It was reported that the House Republicans on the Finance Committee was to going to have a second hearing post Yellen’s testimony  in which four invited guests would provide a rebuttal of the policy put forth by Yellen.

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