Posts Tagged ‘Brexit’

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: Wednesday, 6:45 CST … Our Day Begins

April 9, 2019

There are so many issues plaguing Europe right now, and surprisingly, Brexit is not the most significant. On Wednesday morning — yes, Wednesday — the ECB announces its rate decision and it is expected that rates will remain unchanged,  with the main refinancing rate at zero. The only possible news will be that the ECB actually engages in a tiered financing. This would mean that some banks would get relief from the -0.40% rate that the ECB charges banks to deposit cash at the central bank. There have been rumors that the ECB was planning on raising interest rates in the hope that boost for some European domestic rates would help lift the equity valuations of some profit-stressed financial institutions.

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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: Unemployment Friday, the Data On Which We’re Dependent?

August 3, 2017

The first Friday of August brings the BLS jobs report. Does it matter for the markets?In my opinion, not unless this number is above 300,000 or the rate falls below 4.1%. Average hourly earnings (AHE) is the critical variable of the economic story. The FOMC and others have been adamant that it is the fear of wage inflation that drives the discussion about either an interest rate increase or a “relatively soon” beginning of quantitative tightening. For our preparation, the market estimate is for a nonfarm payroll number of 170,000, an unemployment rate of 4.4% and, more importantly, a 0.3% increase in AHE. As an aside, a number that Art Cashin likes is the hours worked per week, which is expected to remain at 34.5. The hours worked are examined because even if new jobs aren’t created a strong economy will get employers to seek longer hours for current workers.

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Notes From Underground: Brexit, Two Years Is A Long Time

March 30, 2017

The biggest news in a very slow week of news is the beginning of the Brexit plan as Prime Minister May sent a six-page memo to Brussels as Article 50 begins and the two-year time period allotted for extrication from the EU starts the clock ticking in a very formal fashion. I SAY THIS TO ALL MY READERS: Two years is a very long time. There are many political and economic events (unforeseen by the static minds of entrenched power elites) that can dynamically change currently perceived outcomes. The fragility of global politics can wreak havoc with the certainties laid down by the likes of Jean Claude Juncker. The current position of the Brussels bureaucrats is the desire to punish Britain for the temerity of its citizens to vote to exit the “UTOPIAN” construct of the European Union.

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Notes From Underground: After the FOMC, Do Payrolls Mean Anything?

February 2, 2017

This week has presented us with THREE central bank meetings. The results of the BOJ, FED and BOE meetings were no change to the current policies. So, with inflation on the rise and equity markets close to all-time highs for the U.S. and multi-year highs for Europe, the overseers of credit feel no need to tighten monetary conditions. Chair Yellen and her fellow decision makers are evidently comfortable that the wheels of legislation grind slowly and will wait until there is some evidence of fiscal stimulus and tax reform before applying the brakes to a possibly overstimulated economy. The BOJ was cautious ahead of Prime Minister Abe’s meeting with President Trump. To understand the domestic politics of Abe’s possible bilateral deal with the U.S. I am linking to an article from the Asian edition of the Wall Street Journal by Tobias Harris (my progeny).

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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: The Low Yield of Well-Heeled Boys (Trafficking In Central Bank Counterfactuals)

August 3, 2016

Tomorrow the key economic release will be the Bank of England’s interest rate decision. The market is 98% certain there will be at least a 25 basis point rate cut to 0.25%. A majority of analysts also believe that the BOE will increase its asset purchases (QE) from its long, stable level of 375 billion pounds. I DON’T THINK THE BOE IS GOING TO BE AGGRESSIVE AND WILL WAIT TO SEE FURTHER EVIDENCE OF ECONOMIC DATA TO CONFIRM A SOFTENING IN ACTIVITY IS UNDERWAY. A rate cut will accomplish NOTHING except a slight drop in the currency. The recent economic data has been soft but after all the vituperative speech and dire predictions after the vote to LEAVE the European Union, the economy was expected to pause until the market could sort out the hyperbole of negativity.

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