Posts Tagged ‘bond vigilantes’
May 6, 2012
Before politics, it is important to review the two big stories from Friday:
1. The U.S. unemployment data was certainly on the weak side of expectations as nonfarm payrolls came in at a tepid 115,000, very close to the ADP report. Average hourly earnings were soft, which will challenge the view of consumer demand ramping up any time soon. Yes, the unemployment rate dropped to 8.1%, but with so many people dropping out of the job market this indicator lends itself to so much POLITICAL SPIN THAT ITS USE IS BECOMING NEGLIGIBLE. Economists have twisted its meaning and therefore markets are disregarding its usefulness. The real positive in the data was the continue growth in MANUFACTURING as 16,000 factory jobs were created. Otherwise, the number was weak and will be a reason for the FED TO KEEP THE MUSIC OF OPERATION TWIST IN PLACE.
Tags:10-yr OATs, ADP, bond vigilantes, Bundesbank, CDU, deleveraging, ECB, Fed, Francois Hollande, Greek elections, Merkel, Merkozy, Norwegian Sovereign Wealth Fund, operation twist, SPD, unemployment
Posted in 2012 Election, Debt Market, Europe, France, Germany, Greece | 4 Comments »
January 31, 2012
The month of January was kind to equity investors, metals and other commodities. The star performers of last year, U.S. Treasuries, had a quiet month as the FED‘s latest policy statement provided a month-end boost to the long end of the market. I have argued that the BOND markets are badly broken because of the continued intervention of several of the world’s central banks into the sovereign debt markets via QE PROGRAMS of various sorts.
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Tags:Bond, bond vigilantes, ECB, Euro, Fed, gold market, LTRO, Portuguese 2-year note, QE
Posted in ECB, Europe, Gold, Portugal | 3 Comments »
January 10, 2012
One of the most important elements to the purpose of the financial markets is to be an indicator of flawed policy. If money is too loose, the BOND VIGILANTES will assure policy makers that it is time to tighten by pressuring BOND YIELDS higher. As Bill Clinton’s attack dogJames Carville so elegantly stated: “I want to be reincarnated as the bond market because it intimidates everyone.” The huge FED QE PROGRAM has temporarily castrated the BOND market as FED INTERVENTION means that the BOND VIGILANTES lack the fortitude to signal the markets. Even the EUROPEANS have momentarily silenced the market by the huge liquidity pump via the LTRO program with another LTRO coming at the end of February.
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Tags:bond vigilantes, bond yields, dollar swap, Fed, financial repression, James Carville, JGB, MBS, money market funds, Philipp Hildebrand, QE, SNB, swissie, William Dudley
Posted in Debt Market, Fed, Japan, United States | 10 Comments »
January 2, 2012
The “MARKET” will resolve to test the GRIT of traders and investors as the mysteries of politics and economics collide to make the daily lives of traders difficult, to say the least. In 2011, the markets left traders and various investors sleeping like babies as we were relegated to getting up every hour to cry. We must remember that the market’s “JOB” is to cause as much heartache and pain to as many people as possible as money seeks to attain a positive return Last year the market was in its full glory as it caused some of the world’s foremost global macro investors to be humbled in a capacity not seen since the credit market debacle of 1994-95. This year seems to be of a similar ilk as the travails of the EUROPEAN UNION will continue to weigh upon the flows of global capital.
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Tags:BOJ, bond vigilantes, dollars, Euro, Europe, European Union, German bunds, Japanese yen, market, MOF, oil, repo, risk-off, risk-on, stocks, Treasury, UBS
Posted in BoJ, Currency, Fed, Japan | 2 Comments »
December 18, 2011
All these years of the high level meetings at the World Economic Forum in Davos and what do we have to show for its efforts? At the INSIDERS BALL, where the elites exchange views and pay up to $500,000 for the privilege to listen to ideas that are to move the global capitalist system forward. If the results of the last decade are the aggregation of the best ideas that the “best and brightest” are capable of, then it is time to end the charade of Davos and send the global elite home in tears before they can cause any further damage? The DAVOS crowd has fared well as the global economy has suffered creating a huge question mark over the policy output that is the result of the global hierarchy gathered in the scenic environs of Switzerland. This view is not new as the economist Adam Smith warned long ago:
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Tags:Adam Smith, Barron's, bond bears, bond market, bond vigilantes, Davos, debt crisis, ECB, Fed, gold/euro, LTRO, QE, Van Hoisington, Wealth of Nations, World Economic Forum
Posted in Debt Market, ECB, Europe | 2 Comments »
August 11, 2011
Yesterday the screen watching and the trading became so exhaustive that my eyes glazed over and all of the quote boxes began melting together as if Salvador Dali was painting what I was analyzing and trading. Trading fatigue has definitely set in as the world moves from crisis to crisis and back again. The amount of news that gathers on my screen every hour reminds me of being back in graduate school, except that the tension now and the speed at which it arises overwhelms the mind. Not complaining as this is the way I have chosen to make my living.
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Tags:Bank of England, bond vigilantes, Canadian Dollar, ECB, Euro, Gold, Loonie, Salvador Dali, Sarkozy, short selling, SNB, socgen, Swiss Franc, Trichet
Posted in Commodities, Currency, Europe, France, Gold | 14 Comments »
April 18, 2011
I wish to leave everyone with this great quote from a person I have little respect for but this quote is very apropos following the release from S&P this morning, which slashed the U.S. credit outlook to negative from stable. (It’s AAA-rating is still intact.) James Carville said:
“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the BOND MARKET. YOU CAN INTIMIDATE EVERYBODY.”
The quote is great for it captures the real power of the BOND VIGILANTES. A question also arises about the role of the rating agencies and the “anti-trust exemption” they enjoy from the grace of Congress. It must be remembered that CONGRESS has legislative oversight so IS IT IN THE INTEREST OF THE RATERS TO FALL AFOUL OF ITS LIFE GIVERS? Isn’t this similar to the famed ANTI-TRUST EXEMPTION OF BASEBALL, only in this regard we are dealing with a FLOOD OF DEBT? Again, happy holidays to all of the readers of NOTES FROM UNDERGROUND — YRA HARRIS
Tags:bond market, bond vigilantes, Congress, Debt, James Carville, S&P, U.S.
Posted in Debt Market, United States | 5 Comments »
April 14, 2011
The news out of Europe today was not favorable for Greece as it was reported in the German paper DIE WELT that German Finance Minister Wolfgang Schäuble suggested Greece would need to restructure. Schäuble’s comments led the cost of interest rate on the DEBT of the peripherals to rise. By day’s end, Greek 2-year rates climbed to 16.8 percent. Portugal rose 25 basis points to 8.87 percent and Ireland increased 25 basis points to 8.20 percent. Spain’s bonds were also priced higher as rates increased 10 basis points. All in all, not a very splendid day for the European debt-stressed nations, but yet again the DOLLAR could not gain ground against the EURO as an initial DOLLAR rally faded quickly. It appears that some central banks are recalibrating reserves as even a DOLLAR rally seems to be so short-lived. The EURO has performed well even though it has the cloud of uncertainty overhanging its economic and political situation.
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Tags:Bond, bond vigilantes, Congress, CPI, Dollar, ECB, Euro, Fed, Gold, Greece, MBS, Moritz Kraemer, oil, Plosser, Portugal, silver, Treasuries, True Finns, Wolfgang Schauble
Posted in Commodities, Currency, Debt Market, ECB, Europe | 10 Comments »
January 6, 2011
Let me state out again as to why the FOREX markets are going to be a difficult investment in 2011. The emerging markets and commodity-based currencies have been the repositories of global capital seeking to take advantage of the Chinese and India growth phenomena without having to actually invest in the countries themselves. If you like China, buy the Australian equity or currency as it provides a proxy on Beijing’s growth policies: A classic case of providing picks and shovels rather than mining yourself.
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Tags:ADP, Australia, Axel Weber, Bernanke, bond vigilantes, Brazil, Canada, Chile, Chilean peso, China, copper, currencies, Dollar, Equities, EU, Euro, European Central Bank, Eurozone, Fed, Forex, Germany, global currency, Japan, jobs, Nonfarm Payroll, PIIGS, PMI, QE2, Real, U.S., Wall Street Economists
Posted in Brazil, Canada, China, Currency, Germany, Japan, Switzerland, United States | 2 Comments »
November 15, 2010
Today’s markets were all about DEBT. The European sovereign DEBT markets were rife with rumors about Portugal, Greece and Ireland all defaulting, which would lead to a restructuring or some other type of sovereign DEBT relief. It was rumored that Portugal was dropping out of the EURO altogether. All the rumors forced Chancellor Angela Merkel to say that the EURO was the glue that holds Europe together and that Germany would do its part to hold the EU together and that countries in trouble would be provided with the needed funds.
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Tags:Bond, bond vigilantes, China, Debt, Dollar, EU, Euro, Fed, FOMC, QE2, reserve, Treasury bonds, Treasury notes, zero
Posted in Debt Market, Europe, Federal Reserve | Leave a Comment »