Posts Tagged ‘China’

Notes From Underground: Trade Complications (The Power of the Nation-State)

July 25, 2021

That headline is courtesy of Whitewave Trading, an interactive chat room in which high-powered analysis for traders generates some great trades and uses NOTES FROM UNDERGROUND to add a fundamental view. Monday’s Whitwave has this advice: “When and if they ever taper, I’ll turn over the trading card.”

For those never on the trading floor this is in reference to going from the BLUE buy side to the RED sell side. In a follow up to last week’s blog post this makes perfect sense for as it seems that a critical indicator to an equity correction in the U.S. would begin with the FED actually moving to a real TAPERING or in Peter Boockvar’s words, A QUANTITATIVE TIGHTENING.

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Notes From Underground: A Question to Ponder

July 5, 2021

Do China and Russia have state authorities investing in the markets?

If the answer is yes then global investors have many issues to consider. The use of massive amounts of leverage (perfectly legal) utilized by Sovereign Wealth Funds and national pension funds have the power to distort prices as much as the involvement by the FED, ECB and BOJ to cause major distortions in the credit markets. Add in the Bank of Canada, Reserve Bank of Australia, the RBNZ and the price of credit is as overvalued as COPPER during the onset of the pandemic.

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Notes From Underground: An Open Letter To the G-7

June 2, 2021

Every G-7 or G-20 meeting homage is paid to the idea of free markets via the market driven value of each nation’s currency. This is hogwash of the highest order in the world of central bank asset purchase programs. The clarion call is that QE is a domestic-based program meant to meet the inflation target set by the nation’s policy makers and any impact on a nation’s currency is just unintended consequences of keeping a country out of a potential disinflationary cycle. Every central bank statement except the U.S. has a sentence or two about the relative value of a nation’s currency and if too strong then concern about a strong currency being a headwind in meeting the illusion and capriciousness of that 2% inflation target.

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Notes From Underground: The Arrogance of Janet Yellen

April 8, 2021

Since I last wrote, it has been a time for thought, contemplation and discussion. This week I recorded an FRA podcast with Richard Bonugli and Larry McDonald. It was the equivalent of the “Wide World of Sports” as we traveled around the world looking at profitable investment ideas. Enjoy the best 60 minutes in financial global macro analysis.

Click here to listen to the podcast.

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Notes From Underground: Have You All Lost Your Minds?

January 28, 2021

No, I am not referring to the gyrations in the realm of heavily shorted stocks and the attacks by the populace of Sherwood Forest to drive valuations ever higher.

The insanity following Wednesday’s FOMC statement and the Powell press conference leaves me contemplating the works of Kindleberger and Minsky. Complacency in financial markets relying on the kindness of strangers is setting the course for continued madness in all financial asset classes. The POWELL PRESS CONFERENCE YIELDED WHAT OUGHT TO HAVE BEEN THE HEADLINE FOR ALL FINANCIAL NEWS: FED CHAIR POWELL SAYS REAL UNEMPLOYMENT RATE IS 10%.

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Notes From Underground: From Bully Pulpit to Blabbermouth

April 21, 2020

ATTENTION: What you are about to read IS NOT A POLITICAL STATEMENT for I don’t care about your politics and you shouldn’t even know mine. The OVAL OFFICE provides the U.S. president a pulpit in which to amplify his/her voice in a an effort to tip the policy debates in their favor. But one a policy is ill advised from a trade/financial perspective and we will shout it from NOTES FROM UNDERGROUND.

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Notes From Underground: Man Plans, God Laughs

February 2, 2020

It has been three weeks since I have sat down to articulate my thoughts on the global macro financial system in an effort to profit from trade/investment potentials. A lot of the discourse with many readers the focus was on the situation in the Middle East.

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Notes From Underground: The Market Has Much to Consider

December 16, 2019

Last week was filled with the culmination of many issues as we had the FEDECB, trade agreement, UK election, impeachment hearings, and even an attempt at resolving the USMCA trade deal with Mexico and Canada.

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Notes From Underground: The Jobs Picture Is Robust, But Where Is the Wage Increase?

December 8, 2019

This is a rhetorical question of course, for the lack of wage growth is to be found in the vast amount of money chasing a global labor pool.

It is capital that had benefited from the last 30 years of the unleashing workers after the fall of the Soviet Empire and the black/white cat policies of Deng in pursuing growth in China. Now that other emerging economies are attracting capital in an effort to create jobs, there still remains a great deal of downward pressure on wages. Even the movement of supply chains out of China will act as a drag on global earnings as manufacturers will act to hold down wages as way of remaining attractive to foreign direct investment. The world has been watching as Chinese earnings growth has accelerated over the last 10 years but one of the outcomes from the Trump tariffs will be to force a slowdown in China’s wage inflation.

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Notes From Underground: All Tweets, No Substance

December 3, 2019

On Monday President Trump sent out an early morning TWEET that sought to admonish the FED for keeping interest rates too high, coupled with an accusation that “two South American have been presiding over a massive devaluation of their currencies, which has not been good for our farmers.” ALL THE PRESIDENT’S MEN IN THE CAPACITY OF ECONOMIC AND TRADE ADVISERS OUGHT TO BE FIRED FOR MALFEASANCE.

This tweet was so off base that it should have forced the media into hyper critical mode to deconstruct its flaws. Brazil and Argentina have not been intervening to depreciate their currencies.

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