Ok, I couldn’t resist the obvious joke. It seems that former New York Fed President Bill Dudley penned an op-ed for Bloomberg in which he elevated the Fed into an actor in the U.S. political process. The message that Dudley initially tried to convey is one that NOTES has actually expressed concerns: That President Trump has trapped Chair Powell by using TARIFFS as a mechanism to bludgeon the FOMC into lowering rates to counter any of the negative impact from trade frictions unleashed on the global economy. Dudley admonished Powell to play the role of Bartleby the Scrivner in Melville’s short story, that when it comes to cutting rates in response to financial implications of the China/U.S. trade war, simply say “I choose not to.”
Posts Tagged ‘currency war’
Notes From Underground: The August of Our Discontent
August 7, 2019When August rolls in the markets thin as Europe heads to the beaches and New Yorkers head to the Hamptons before Labor Day. This means every tweet President Trump is amplified by the LACK of market liquidity. On Wednesday, the president was back in full confrontation with Federal Reserve Chairman Jerome Powell because three central banks CUT interest rates last night: India,Thailand, and, most importantly, the Reserve Bank of New Zealand, which surprised most market analysts by cutting 50 basis points instead of 25.
Notes From Underground: Jay Powell’s Coming Out Party
February 26, 2018There are several important areas for discussion but first I wanted to post a podcast from the Financial Repression Authority that I participated in last Wednesday with Jim Bianco and Peter Boockvar. Pour your libation of choice and have a listen. Please post any questions or points on information on the blog in order to stimulate a discussion that creates potential profitable trading ideas.The moderator Richard Bonugli does a great job of provoking discourse but allows the conversation to freely flow in search for high quality dialectic. Enjoy.
Notes From Underground: Why Are The G-7 Finance Ministers Meeting In England This Weekend?
May 10, 2013There was a Reuters story yesterday by William Schomberg, “G7 Finance Chiefs to Discuss Bank Reform Push.” Very few people picked up on this but it seems strange that all the sudden a meeting is called to discuss what elements of bank reform. Are they going to try to persuade Germany to get behind the EU push for a banking union and if so why the hurry before the September German elections? The idea of a banking union with resolution authority is sure to be a lightening rod for all the German angst about the bailouts of the peripheral nations. The Reuters piece notes that some G-7 officials are upset that the U.K. called the meeting so soon after the recent IMF talks in Washington. One official said, “I am really annoyed I’ve got to give up my weekend for this.”
Notes From Underground: Watch Me On USAWatchdog
February 13, 2013Today, I appeared on USAWatchdog, nonpartisan website run by former journalist Greg Hunter. Before creating USAWatchdog, Greg spent nearly nine years as a network and investigative reporter for outlets such as ABC News, Good Morning America and CNN. Also, in a 2008 report, Greg exposed the trouble in the banks, warning viewers about the coming problems before other reporters picked up on the impending crisis.
Click HERE to watch express my thoughts about the currency war, G-20 and central banks. Also, don’t forget, copies of “The Rotten Heart of Europe” are still on sale. To order your copies, e-mail rottenheartofeurope@gmail.com.
Please send checks to:
Yra Harris c/o Shepard International
141 West Jackson Blvd., Suite 2270
Chicago, IL 60604
Notes From Underground: It’s Now Showtime for the G-20 and Its Diminutive Sidekick, the G-7
February 11, 2013This week brings the Moscow circus to the world stage. The world’s major economies meet in Moscow as the Russians are presently in the leadership position of the G-20’s rotating presidency. It used to be the G-7 nations that crafted an economic blueprint for the World Bank and IMF to somewhat adhere, but as much of the global economic growth is now in the BRICS and the other emerging economies, the world’s former colonial powers have had to make room for the rising economic nations. Most of the time the G-7 and G-20 meetings have been photo-ops for world leaders, but every once in a great while something constructive actually makes its way into global policy. The immediate global consensus after the Lehman debacle helped stem the global credit markets from total collapse. This G-20 meeting will not be one of the constructive outcomes as the G-20 members are nowhere near any type of consensus.
Notes From Underground: Pay No Attention … To the Stock Market Behind the Curtain
February 10, 2013There are ideas permeating the financial media that need to be challenged. There is a continuing idea that the present value of the U.S. stock market is stretched based on historical valuations. I will continue to question this assessment FOR HOW DOES AN INVESTOR VALUE FUTURE EARNINGS IN A ZERO INTEREST RATE ENVIRONMENT? Further more, corporate earnings need to be evaluated with consideration for record low borrowing costs and stagnant wages. This week I hope to take a look at the historical percentages of payroll and interest expense and to see where the present numbers fall in relative terms. The markets may well be overvalued on some normal assessment but we are not operating in any sense of “normalcy.” This present financial atmosphere renders so much historical analysis worthless, which is why this year portends to be so volatile.
Notes From Underground: The Markets Continue Floating On A Sea Of Liquidity
January 28, 2013The world’s equity markets continue to float on the continued liquidity provided by the world’s central banks. Last week the European markets saw short-term rise on the announced payback of LTRO (Long Term Refinancing Operation), which was money lent by the ECB to European banks to prevent the wholesale selling of sovereign and commercial debt that had fallen in value. The European Central Bank took the devalued bonds and provided the banks with cash euros. This prevented a total collapse of the sovereign debt markets. Now banks that are flush with liquidity are taking back the debt and paying back the EUROS resulting in a short-term tightening in the EURIBOR RATES. Prior to the last ECB meeting, I advised that the ECB could cut rates for the market had already priced in a rate cut. Last week’s action, while a tightening, is actually a market reversing expectations, which is why the global equity markets had so little reaction.
Notes From Underground: Back to Work and the Battle Cry of Pepper Spray Davos
January 22, 2013First and foremost: Notes From Underground has become a global community and the outpouring of support and condolences to my family has been phenomenal. Again, my heartfelt thanks to all who expressed such wonderful thoughts.
Much has transpired since last Sunday as the Swiss franc and the Japanese yen have continued their recent weakness as intervention with the intention of forcing the YEN and FRANC lower have been very successful. Also, as usual, I will poke at this weeks circus in Davos, Switzerland. From my perspective, the entire conclave of insider trading–as the rich and business elites gather to discuss ways to save the world–in the last 20 years are a direct result of the political and economic movers and shakers exchanging ideas in the Swiss Alps. Yes, we go from crisis to crisis.
Notes From Underground: Will Big Ben Turn Back The Hands Of Time?
December 11, 2012The FOMC will release the results of two days of policy deliberations at 11:30 a.m. CST Wednesday and the market is convinced that the Bernanke FED will vote to end Operation Twist but increase FED Treasury purchases. It may not be the full $45 billion but something above $25 billion, which would be in addition to the already promised purchases of $40 billion of mortgage-backed securities (MBS). It will be difficult to continue Operation Twist because the FED‘s System Open Market Account (SOMA) is nearly void of debt of less than three-year duration. Any new FED purchases will have to be with cash resulting in an increase in bank reserves. The result be not be a Maturity Extension Program but a new round of Quantitative Easing. It is doubtful that the FOMC statement will allude to fiscal policy but will just remain true to discussion of the dual mandate.