Posts Tagged ‘Draghi’

Notes From Underground: Yra Offers a Modest Proposal

October 1, 2013

First and foremost: This week’s postponement of the unemployment report has provided me with an idea. Because of the fear of data leaks from the sequestered media and the influence of high frequency trading and headline algorithm readers, I HEREBY PROPOSE THAT ALL GOVERNMENT DATA RELEASES SHOULD TAKE PLACE ON SUNDAY MORNING, OR IN THE SPIRIT OF PAUL VOLCKER, SATURDAY EVENING. By releasing the Federal data on the weekend, market participants and journalists could analyze the data and do their releases prior to the Asia openings on Sunday night. This would make the markets more efficient but of course less volatile. I know it will mean less opportunity for the high-speed correlative traders but the result would be to provide the markets with more causation and less correlation and hopefully return a modicum of trust  to the retail trader who appears to be missing from the present market environment. Just trying to bring some sanity to the madness that currently exists on a day-to-day basis. The closing of some government functions may allow some thoughts on alternative ideas. Just thinking outside the beltway.


Notes From Underground: Europe … No Escaping the Battle For Supremacy

April 28, 2013

The question that is framing the most recent debate in European circles is the one asked by Bernard Connolly for the last 18 years: Whose currency is the euro and who controls its outcome? The media has been full of stories about the gathering forces allied against AUSTERITY:


Notes From Underground: A “Portuguese Man of War” Enters Draghi’s Harbor and Fires a Shot

February 14, 2013

Two events roiled the currency market this morning. First, the GDP numbers out of many European economies were weaker than expected. The softness of European economic activity has stirred the complacency of recent buyers of EUROs and caused some unwinding of the EUR/YEN and EUR/GBP cross rates. The second event that unnerved recent buyers of EUROs was a comment by the ECB Governor from Portugal, Vitor Constancio. It was reported that Mr. Constancio said in response to recent Euro strength that “… negative rates always possible.”


Notes From Underground: President Mario Draghi Debuts as a Song and Dance Man

January 10, 2013

As expected, both the Bank of England and the European Central Bank maintained present policies and choice to wait until the economic situation became clearer. The BOE was boring as the decision was announced and Mervyn King does not hold a post-meeting press conference. While the ECB held rates at 0.75% and this time it was unanimous, the Draghi press conference was entertaining. I must admit that the caliber of questioning by the European press is of a far higher quality than American journalists interviewing Chairman Bernanke. Last night I mentioned that for this scribbler, the issues of competitive currency devaluation and the idea of targeting economic thresholds were going to be the most significant opinions possibly offered by President Draghi.


Notes From Underground: Turning Back the Hands of Time

December 17, 2012

Or, a review of why Draghi was the Financial Times’ “Person of the Year.” Here are two blogs, which are reflective of the week that was. We still find relevance in this week as it sets the table going forward as we look to 2013.

July 25–Notes From Underground: Schaeuble Proves Why 2+2=5

July 29–Notes From Underground: From Merkozy to Merde


Notes From Underground: Moody’s Hits France With A Yellow Card

November 19, 2012

Well, Moody’s downgraded the France’ sovereign rating from AAA in what was an obvious bow to reality. MOODY’s, WHAT TOOK YOU SO LONG? This will really be a bitter pill for President Hollande as it was only last week that the “French cock” was crowing about how well the bond markets were evaluating his performance as the leader of France. I reminded readers that the recent performance of the French debt had more to do with Mr. Draghi’s aggressive actions than any policy put forward by the Hollande government.


Notes From Underground: Mario Draghi Reveals He’s A Fleetwood Mac Fan; Says GOLD IS A “Mystery to Me”

November 8, 2012

As today was central bank day in Europe, both the ECB and the BOE had rate decision meetings and left their current policies in place. The BOE did announce that it was “halting” the expansion of the QE  program at 375 billion pounds as it deems the recent increases in its bond buying program to be less effective. Recently, BOE Deputy Governors Paul Tucker and Charles Bean have stated that “asset purchases may no longer have the same impact on the economy as when first introduced.” (Bloomberg) The market had different interpretations as to the reason that why the BOE was curtailing the QE bond purchases. 1. The recent rise in inflation was causing the halt; or 2. the lessened impact of recent QE was going to mean that the bank was going to increase the funding for lending scheme in which the BOE provides incentives for commercial banks to lend more money to small and medium businesses. This is of interest for FED watchers because BOE Governor Mervyn King has been a trail blazer for creative central bank actions and the FOMC may mimic some of the BOE actions to get a boost to a low velocity of money situation.


Notes From Underground: Japan’s BOJ … Seize the Day

October 28, 2012

Monday night the BOJ will announce its newest and latest effort to stimulate the economy and most importantly try to undertake some genuine measures to weaken the YEN. The Japanese economy is suffering under the weight of an overvalued YEN. The YEN was only a minor problem when the global economy was experiencing strong growth but with the BRICs slowing and EUROPE on the cusp of a major recession, the Japanese policy makers have to confront the YEN head on–time is not on their side. The time for the BOJ and Ministry of Finance is now for the market is wanting to be SHORT YEN so if the Japanese policy makers can seize the day and invoke some type of foreign bond buying scheme the currency markets will do the heavy lifting for the BOJ/MOF.


Notes From Underground: The Markets Are Wrong (Or Draghi Lets Us Know Who Is In Charge)

October 25, 2012

Following up last night’s post, Arthur left a note on the blog linking an article from Bloomberg Businessweek, written by Brendan Greeley. The language of the article is crystal clear and provides another example of a Euro policy maker claiming far more insight than the collective wisdom of Mr. Market. “Investors ,he told the Bundestag, are ‘charging interest rates to countries they perceived to be the most vulnerable that [go] beyond levels warranted by economic fundamentals and justified risk premia. This fear is “unfounded. The market is wrong.'”


Notes From Underground: Central bank Poker–Three Checks and, Of Course, No Raises

October 24, 2012

Yesterday, the Bank Of Canada surprised no one as Governor Mark Carney held rates steady at 1%. The BOC statement also maintained last month’s idea that “over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2% inflation target.” The Canadian dollar rallied on the news as it seemed that the market thought the statement would be more dovish following Carney’s comments of October 15, but instead it was steady as it goes. Today, Governor Carney held a news conference and the headline put out by the news services was “Case For Raising Rates ‘Less Imminent,'” which of course led the programmed headline algos to sell the Canadian dollar because of the “dovish headline.” The press conference was so much more than that and really reiterated the BOC statement and reflected the dilemma that the Carney faces in trying to curb private credit growth in a low interest rate world. Nonetheless, the market currency markets kept the pressure on the LOONIE so a risk-off profile was maintained.