Archive for the ‘United States’ Category

Notes From Underground: Thursday In the Park With Louis Gave

January 10, 2021

I had the pleasure of sitting down with Louis Gave last week and we discussed many of the pressing issues facing the global macro world. In May 2020, Richard Bonugli provided the FRA platform as a place to discuss the global outlook with a little bit of FORESIGHT. We HIT IT OUT OF THE PARK. Hopefully, our most recent analysis will provide similar investment outcomes and maybe succeed in clarifying some important issues facing the investment community as 2021 begins.

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Notes From Underground: Where Do We Go From Here?

January 3, 2021

In 2020, the entire world endeavored to smooth out a new wrinkle in the global macro landscape as the covid pandemic spurred fears of a global depression as economies shuttered to stem the virus’s spread. The FED stepped in to ensure that the global system had access to enough dollars as corporations and individuals rushed to sell assets in an effort to meet a potential economic contraction. The U.S. central bank did its best to reduce the fear of deflation by opening dollar swap lines to more foreign central banks, as well as pushing U.S. interest rates back to the lower zero bound. The huge amount of liquidity thrust upon the financial system stopped a global selloff in its tracks.

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Notes From Underground: Never Have Been and Never Will Be

December 21, 2020

… a supporter of Treasury Secretary Steve Mnuchin. In my opinion, he’s another Wall Street hack devoid of any genuine knowledge of the global macro world in which he his sent to do battle on a daily basis. Last week’s decision to label Vietnam and Switzerland as “currency manipulators” is badly timed, badly chosen and badly misinformed. Why would you name Vietnam a currency manipulator when a large part of the Trump administration’s policy is directed toward relocating global supply chains away from China. In addition, labelling Vietnam a “currency manipulator “is an immoral and unconscionable act. Even Bob McNamara is spinning on his “rotisserie in hell.”

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Notes From Underground: Going Around and Around

December 13, 2020

There two issues whose headlines are creating intraday volatility: Brexit and Congressional tweets surrounding another covid stimulus package (or not). As it stands, so many workers are struggling due to job losses — though no fault of their own — and small businesses are trying to keep their doors open.

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Notes From Underground: Return of the Bond Vigilantes?

December 6, 2020

After the performance of the 30-year yield on Friday, we must ask this question. The overall release was on the weak side as jobs created were far less than expected, even though the RATE dropped to 6.7% and average hourly earnings increased by 0.3%, higher than forecasted. The AHE are difficult to measure as it can reflect lower wage earners being left out of the job market, as well as bonuses paid out to middle- and upper-level management.

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Notes From Underground: Closing In On Critical Levels

December 3, 2020

In the past six months, NOTES FROM UNDERGROUND has always been more podcast than blog posts so it’s a very good time to review and put the markets into perspective are as we approach 2021. NOTES has been on the bearish side of the DOLLAR trade since Wolfgang Schaeuble — the purveyor of the German NEIN and infamous Schwarz NULL (black zero) — pivoted and promoted a large grant program to help the severely impacted European economies suffering from COVID and a massive debt burden. As Schaeuble suggested, giving more loans was similar to giving the debt plagued nations ROCKS, weighing them down ever more, while giving large GRANTS was similar to providing BREAD.

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Notes From Undergound: Marc Faber, Wow

October 13, 2020

It is a pleasure to have sat down with the paradigm of global macro, Dr. Marc Faber. We, alongside Richard Bonugli, talked commodities, currencies and bond markets. Enjoy the podcast and make it a double of your favorite libation. No, it’s not doom and gloom. It’s insights into the current global financial situation presented with potential investment opportunities.

But first, let’s review a few things:

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Notes From Underground: Too Little Is Worse Than Too Much

October 6, 2020

Following Federal Reserve Chairman Jerome Powell’s speech Tuesday at the National Association for Business Economics, the media (financial and mainstream) ran with the idea that Powell would rather have the government err on the side of TOO MUCH STIMULUS instead of failing to provide the needed boost to an economy that’s beginning to stall after a robust third quarter.

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Notes From Underground: Narcissism Has Consequences

October 1, 2020

On Friday, there’s a new dose of unemployment data. While these blog posts have been infrequent, my view remains the same: The Federal Open Market Committee may be keen on promoting inflation while returning to the pre-Covid employment levels, but no amount of robust jobs growth will move the FEDERAL RESERVE off its current policy of lower for longer.

In regards to the year-end data, I want to know: If unemployment is below 9% while the annualized inflation levels were to rise to 6%, would the FED raise rates? If your answer is no then you agree that the data outcomes are benign. At this juncture much more concerned with the next phase of fiscal stimulus and the DOLLAR.

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Notes From Underground: A Podcast for the Long Weekend

May 21, 2020

This Memorial Day weekend I’m going to take some time to reflect on those who gave their lives to provide the opportunity for all of us. This epidemic has made a shambles of everything we thought was a certainty just three months ago. In that spirit I present a 50-minute discussion with the highly respected Louis Gave of GaveKal on all things macro. Be at peace and enjoy.

Also, a note to Secretary of State Mike Pompeo: Tone down the China rhetoric, especially on the Taiwan issue. A thermonuclear war is not a quality vaccine against COVID (Where are you Tom Lehrer?)

Click here to listen to the podcast.