Archive for the ‘UK’ Category

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: Deep Discourse With Anthony Crudele (and Futures Radio)

December 10, 2018

On December 6, I had the pleasure of talking with Anthony Crudele at Futures Radio. Anthony and I covered Russia, yield curves, gold/currencies and the Chinese tariff situation. Enjoy the discussion, be it on the tread mill, stationary bike or sipping your favorite libation. My favorite drink is now Wild Irish Rose sent to me by the great trader and humorist P. Lynch. And please, keep the comments coming as powerful questions lead to quality discourse and potential profitable trades.

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Notes From Underground: Tell Me Why You Are Crying

October 23, 2018

The current market temperament is causing angst among investors. A relatively strong earnings season is failing to provide support to the U.S. equity markets that many analysts have been promoting. The media is wondering what will halt the continuing slide in stocks around the globe. We at Notes From Underground have pondered what the primary catalyst would be

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Notes From Underground: Is the Yield Curve Taunting the Fed?

June 6, 2017

There were many responses to last night’s post regarding one of my favorite topics: the yield curve. The airwaves have been filled with opinions about the impact of the 2/10 curve on bank stocks and other financial asset valuations. Long-time readers know that I often note the significance of the shape of the curve for hinting at possible investment opportunities. Last year the 2/10 curve FLATTENED (a relative term) to long-term support levels at 74.8 basis points and then steepened out to about 150 basis points as the market feared a Trump inflation scenario.

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Notes From Underground: The Rallying Cry Remains, “Pepper Spray Davos”

January 16, 2017

We at Notes From Underground have published more than 1,000 posts during the last seven years. I have voiced my displeasure about the annual gathering in Davos for the past five years (last year’s Davos post is below). My battle cry was (ans continues to be): PEPPER SPRAY DAVOS, a response to the heinous police overreaction to the pepper spraying of University of California–Davis students in November 2011. The police POURED pepper spray onto student protesters, a contemptible act of police brutality. I thought if the UC–Davis students were subjected to such a police response for blocking a sidewalk the crony capitalists of global monopolies are surely worthy of such a contemptuous action. The corporate chieftains and their political sycophants, who exchange “insider views” for large speaking fees (and of course a hope to secure a job after leaving political office), have badly damaged the world.

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Notes From Underground: Janet Yellen’s Speech Scared The Halloween Out of Me

October 18, 2016

On Friday, Chair Yellen delivered a speech at the Boston Federal Reserve Conference, “At The Elusive Great Recovery: Causes and Implications for Future Business Cycle Dynamics.” Her speech was titled, “Macroeconomic Research After the Crisis.” My short response to the questions posed by Janet Yellen have been answered by many NON-FED economists and most prominently by Richard Koo in his great work on BALANCE SHEET RECESSIONS. My sense is that the FED is an insular organization and pays little note of those outside its Ivory tower. Yellen’s second question was: “Whether individual differences within broad groups of actors in the economy can influence aggregate economic outcomes–in particular, what effect does heterogeneity  have on aggregate demand?” Now, GET REALLY SCARED:

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Notes From Underground: Clearing Up Some Odds and Ends

August 1, 2016

This week brings Prime Minister Abe’s fiscal plan, the Reserve Bank of Australia’s rate decision, the Bank of England’s monetary results and U.S. nonfarm payrolls on Friday. So let’s put some perspective to tonight’s main events. The RBA will announce its overnight interest rate and consensus is calling for a 25 basis point CUT to 1.5%. Analysts believe that the weakness in the natural resource sector is aiding the reduction in capital expenditure. Also, Aussie inflation is at the bottom of the RBA‘s target range, which provides rationale for the RBA. I am not so sure of a CUT for this is coming at the end of Governor Stevens’s term at the RBA. Dr. Phillip Lowe will take over September 16 so this is the penultimate meeting for Mr. Stevens.

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Notes From Underground: Japanese Elections, Italian Banks and May Day in the U.K.

July 11, 2016

Just some summary points as this year the summer doldrums will prove to be anything but:

1. The Japanese elections for the upper-house unfolded true to expectations but the impact of the win for P.M. Abe will take time to play out. There are winners and losers in Abe’s victory. One of the losers could well be the prime minister as the final results do not provide enough margin to pursue constitution revision because the LDP does not have enough votes without the support of its partner Komeito. More importantly, the TPP (TransPacific Partnership) may not pass because of several opposition victories in the rural prefectures. As Tobias Harris maintains, the “bleak outlook for ratification in the U.S. … the {Japanese} government will have to decide whether it is worth expending political capital on an agreement that may not come into force.”

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Notes From Underground (Repost): A Celebration to the End of Q2, “A Single Spark To Light a Prairie Fire” (January 11)

June 30, 2016

The world is sitting on piles of tinder. Two of the potential dangers have passed in the last seven days. The Brexit vote has taken place and the Spanish elections have finished without any new disruption to the European political scene. In fact, Spain was interesting as Spanish voters seemed to be afraid of a Brexit-type market reaction and moved more support to the center-right as a vote for the known.

BUT TODAY THE ECB HAS POTENTIALLY IGNITED THE FLAMES OF GERMAN ANGER AS DRAGHI MOVED FOR THE QE PROGRAM TO BUY LOWER GRADE DEBT. THEY HAVE RUN OUT OF HIGH QUALITY BONDS TO BUY. This will not sit well with the AfD supporters in Deutschland. There were massive moves in the European sovereign spreads after the news release and more will certainly follow as the program becomes clearer.

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Notes From Underground: Three Cheers For the Fed (They Kept Out of the Fray)

June 29, 2016

It has become standard operating procedure for the FED to enter the market in an effort to minimize the impact of any low probability event with market disrupting outcomes.The BREXIT vote surprised the markets but the FED allowed investors to absorb the financial pain and stayed in the watchtower.

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