Posts Tagged ‘Angela Merkel’

Notes From Underground: FRA Podcast Replay (January 29)

March 19, 2017

It has been a month since I last wrote. My hiatus was inadvertently extended as Ecclesiastes certainly entered my personal life. My sister Joyce suddenly passed away, which caused me to slow my mind and reflect on many things. Losing your baby sister will  cause one to ponder, or as it was said in Cool Hand Luke: “When a man’s mother dies and he gets to thinking rabbit and running, a night in the box.” So I have put myself in a mental box. However, I have also experienced the birth of my second grandson, thus to every season a time and purpose.

During the seven-plus years I have been writing Notes From Underground I have shared many life-changing moments with my extended family of readers. So it is with a renewed spirit and laser focus thoughts that I embark on analyzing the global-macro world in search of profitable trades and investments. The FRA podcast I posted January 29 (click the highlighted text) is a renewal of this year’s focus on crafting the NOTES narrative. There has been much in the way of global political events during my hiatus but I will refer to some as significant in various aspects as we proceed.

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Notes From Underground: FOMC Decision Day Is Upon Us

January 31, 2017

Janet Yellen and the FED take center stage tomorrow and the consensus is for NO CHANGE. The market believes the FED will be on hold until March. BUT I OFFER THIS: If I was the FED chair I WOULD RAISE RATES 50 BASIS POINTS to take some of the risk out of the U.S. equity markets. The S&Ps are virtually unchanged since the December FOMC meeting but the market’s enthusiasm for anticipated tax cuts, regulatory relief, and possible currency intervention means the FED cannot wait to let the economy run “hotter for longer,” especially because of the 4.7% U3 unemployment level. If Chair Yellen wishes to burst the TRUMP exuberance it is time to move aggressively to stem the rise of a potential inflationary threat.

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Notes From Underground: First Friday Of The New Month, You Must Be ‘Jobbing’ Me

January 5, 2017

I’m still nursing a New Year’s hangover. It takes a long time for the mind to rid itself of all the news the mainstream media deems fit to read. But as the third rock keeps spinning, markets will keep moving and we will strive to untangle the ball of confusion. After today’s tepid ADP data the market has settled into a consensus for 175,000 nonfarm payrolls. Again, I would love to see a number greater than 250,000 just to test the recent market action. BONDS rallied, currencies rallied against the DOLLAR, precious metals are showing early year strength and commodities have held support levels in the age of TRUMFLATIONARY EXPANSIONARY EXPECTATIONS.

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Notes From Underground: Old Friends

November 20, 2016

Time it was

and what a time it was, it was

a time of innocence

a time of confidences

long ago it must be

i have a photograph

preserve your memories

they’re all that’s left you [Simon & Garfunkel]

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Notes From Underground: The Importance of Deutsche Bank for the Global Financial System

September 28, 2016

The reverberations from Merkel’s Boner will be systemic in nature. The more I think about the ridiculousness of Chancellor Merkel’s ill-advised comment about not financially supporting Deutsche Bank, the greater my fear of a cataclysmic credit event. According to a recent Zero hedge piece, DB has many trillions of derivatives on its books. Yes, it is notional value but as we learned with Lehman notional value is irrelevant when counterparties to Deutsche’s SWAPS and other credit derivatives demand their collateral back. In today’s shadow banking environment, the rehypothecation of credit through securitized instruments compounds the problems of a default or bankruptcy.

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Notes From Underground: Merkel’s Boner, Take Two

September 26, 2016

It seems that 108 years is enough time to pass to relive history. For those who are not sports fans, Merkle’s Boner is a famous mistake made by New York player Fred Merkel, who didn’t touch second base and was called out erasing the “fact” that the New York Giants had beaten the Chicago Cubs. The major GAFFE led to the Cubs beating the Giants and the CUBS moving to the World Series where they defeated the Detroit Tigers for their last World Series championship only 108 years ago.

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Notes From Underground: If I was A Rich Man, They Think You Really Know

April 19, 2016

The world has left the economic realm and is now heading into the political, which the Fed’s models cannot weigh because politics are too far complex and cannot be explained by six variables of a perfect free market system. There was a Financial Times article today, titled, “Bond Guru Jeffrey Gundlach: Brexit Not Going To Happen.” In a paradigm of static thought, Gundlach opine that Brexit will not pass in the U.K. for “the devil you know is better than the devil you don’t know. Look at what happened with Scotland. People aren’t going to pull a lever for Brexit, so I don’t even think that’s worth considering  in the present time.”

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Notes From Underground: Old Friends Sat On A Park Bench Like Bookends (Simon & Garfunkel)

April 10, 2016

I’ve been staring at this image and keep thinking about the three living Fed Chairmen that sat on the stage April 7 and the fourth that was teleported from Washington, D.C. I was thinking about the replies to weak questions posed by the  moderator and better questions from the audience. I thought about the question I would have asked first. I would have asked each Fed Chair what they had thought about the role of GOLD in the post-Bretton Woods global financial system. Ben Bernanke famously opined that he didn’t understand GOLD but seemed very comfortable visualizing a role for BITCOIN. Yellen has never openly stated her concern about the barbarous relic. Back in the 1960s, Alan Greenspan wrote a serious paper for the Ayn Rand society on the important role of GOLD in a global system and more important for the impact of  GOLD for a democratic capitalist world.

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Notes From Underground: The Emptiness of the Chattering Classes, Opining On Everything With Vacuous Thought

March 14, 2016

The main political news of the weekend was the falling electoral support of German Chancellor Angela Merkel in the three regional elections. The refugee issue continued to be the theme of voter discontent, according to the script presented by the nattering nabobs of nonsense. I have written that the financial repression foisted upon the German saving class was going to be a problem for Chancellor Merkel as insurance and pension funds were being punished in an effort to bail out the peripheral banks and ultimately the heavily indebted governments of the non-German core countries. Unlike the U.S., which has some political input on the role of the Federal Reserve, the German electorate is subjugated to a central bank over which it has no authority.

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Notes From Underground: The Heaviness of Being a Global Macro Trader

March 7, 2016

There is so much in the political realm that proves the concept of 2+2=5. I will continue the analysis of the impact of politics on markets but remember there is so much political tinder that can ignite the fires of market volatility. A quick sample from over the weekend can be found in Europe where local elections in Frankfurt, the home of the ECB, resulted in large gains for the AfD right-wing party. More dramatically, a small Neo-Nazi party won 17 percent in one district. Support for Merkel’s party, the CDU, and her coalition partner SPD, dwindled. This weekend’s regional elections in three German states will probably result in more losses for the Merkel government. Again, as bad as the refugee problem is in Germany it seems that the monetary policies of the authoritarian ECB and President Draghi are causing greater angst among the German population. Negative interest rates in Germany continue to repress German savers, resulting in a loss of confidence in the established political elite.

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