Posts Tagged ‘BOJ’

Notes From Underground: The BOJ Leading Off With the Fed On Deck

July 29, 2019

On Monday night, the Bank of japan announces its policy intentions and consensus is for no change. The ECB remained on hold with promises of more liquidity to come so it is doubtful that Governor Kuroda would do anything ahead of the FED.

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Notes From Underground: Prairie Fires On the Global Landscape

April 14, 2019

Let me put introduce areas of great concern that markets acknowledge but do not price for as they are too difficult to weigh. The Chinese/U.S. trade negotiations are simple relative to the potential impact from Turkey, Venezuela, Europe, and, of course the final decision on Brexit.

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Notes From Underground: The Jobs Report Was Not Data Dependent

March 10, 2019

Wow! That was a serious miss by the forecasters on job growth as only 20,000 new jobs were added. The huge miss will prove to be an aberration but doesn’t matter at all. As I pointed out in Thursday’s blog — as well as on the PODCAST Peter Boockvar and I recorded with Richard Bonugli from FRA, the ECB’s pivot toward liquidity addition via cheap bank loans has forced the FED into a policy of “watchful waiting.” And Chairman Jerome Powell reiterated that stance in his speech Friday night as he stressed the need for caution in the search for normalization on rates and the balance sheet.

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Notes From Underground: Happy Anniversary Twentieth ZIRPiversary, BOJ!

February 12, 2019

This is the perfect time to discuss the effects of zero interest rates as it has been 20 years since the Bank of Japan embarked upon the path of crushing interest rates in an effort to jump-start inflation in Japan. This is very important as we enter into the discussions about the potential for negative interest rates in the U.S. while also entertaining the idea that the U.S.’s growing debt pile and deficit have no consequence as long as the government borrows in its own currency and optimizes its printing press.

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Notes From Underground: Mario the Magician Has Lost His Assistant

January 23, 2019

The Bank of Japan did not surprise the markets as they remained committed to the lunacy of QQE, even with positive growth for many years. In an effort to make the central bank’s policy ever more relevant the BOJ lowered their inflation expectations, which the markets interpreted as lower for longer, resulting in a flurry of YEN selling of against all of the major traded currencies. There was even movement in the Swiss/yen cross as both central banks battle to keep their currencies in check by keeping interest rates negative.

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Notes From Underground: Germany and France Codify the Premise of Europe

January 22, 2019

In a desperate attempt to deflect from the damage to his presidency, Emmanuel Macron on Tuesday codified what Bernard Connolly has written about for 25 years. As Charles de Gaulle supposedly said to Konrad Adenauer: “Europe is France and Germany, the rest trimmings.” In a resurrection of European history, Angela Merkel and Macron signed a new Treaty of Aachen. While the treaty language is vapid, the symbolism cannot be minimized. Germany and France promise to come to each other’s defense if attacked while also promising to work for a more unified financial and fiscal system.

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Notes From Underground: The Umpire Strikes Back

December 19, 2018

The Fed chairman is situated as the key arbiter of the economy and rules via its DUAL MANDATE. Given that it has a research staff of at least 500 economists the FED positions itself as ALL KNOWING, which is certainly okay as long as it accepts the consequences and lays aside the use of counterfactuals when its policies may turn out to be very misguided.

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Notes From Underground: Around the World With Yra + Rick

September 20, 2018

On Thursday Rick Santelli pushed and prodded and as a result, we were able to travel from Japan to Europe in an effort to discuss some of the more pressing issues confronting the global macro world. First, we stopped in Japan to discuss how the BOJ and Governor Kuroda will be able to extricate itself from five years of QQE which has seen the BOJ accumulate Japanese debt and equities. Of course the end game is to reach the self-imposed inflation level of 2 percent that has proved to be an agonizing level to achieve. As a reminder, when a nation is saddled with huge debts the best relief is to be found in inflation, which results in an ultimate money illusion as debts are paid back with an ever-depreciated currency.

Click on the image to watch me and Rick discuss global policy.

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Notes From Underground: Central Bank Palooza

July 30, 2018

Coming on the heels of my first Kenny Chesney concert I am viewing the synchronicity of central banks as a reflection of the rhythms of global financial repression. Last Thursday, the ECB issued its last statement before the summer recess, while this week we have the Bank of Japan tonight, the FED on Wednesday and the Bank of England on Thursday.

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Notes From Underground: Areas of Global Macro Concern

July 24, 2018

President Donald Trump’s continuous tweeting creates volatility in the markets but the impact lessens as participants become hardened to the vagaries of the tweets. An area that does concern me, though, is the amount of insider trading I suspect is taking place.

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