Posts Tagged ‘Egypt’

Notes From Underground: Who’s COO COO For CoCos?!?!?

August 18, 2013

The newswires over the weekend were quiet except for the continued mounting tensions in Egypt.  At this juncture It is too difficult to measure the impact of the political crisis on global financial markets as the situation is “fluid” and rumors run rampant. There is talk that the U.S. is cancelling scheduled military manuevers with the Egyptian army over displeasure with the crackdown on the Muslim Brotherhood. Soon after that rumor, news from Russia was that President Putin was putting the Russian military resources to the backing of the Egyptian army, reflecting the “fluidity” of the situation and Russia again reminding the world that the U.S. is not the only game in town. Even the Saudi foreign ministry has come out in its support of the Egyptian military in its efforts to combat the “forces of global terrorism.” I return to Yra’s first rule of global finance: “Money is FASCIST and craves stability.” While all this uncertainty clouds the political scene in the Middle East, the only constant is that the Europeans are meeting to decide what actions to take against the Egyptian military, so any sense of certainty about Egypt is probably a false algo-driven headline or TWEET.

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Notes From Underground: There Will Be No Independen​ce From the ECB or BOE

July 3, 2013

Ah, July 4 and the living is easy but the trading is difficult. The algo trading models make data releases perilous but the influence of geopolitical events results in more variables in motion, thus the yellow flag is waved and caution is advised. Brazil, Turkey and certainly Egypt are in crisis mode. The military has seemingly taken control of the Egyptian government and as I write it is uncertain as to what the response will be from the supporters of President Morsi. The markets will at first blush will support the imposition of military rule for Notes From Underground‘s first law is MONEY IS FASCIST, meaning it craves POLITICAL STABILITY as a prerequisite. (more…)

Notes From Underground: The revolution will not be televised*

February 14, 2011

As I was inundated with the news out of the Middle East it was simple to recall the song by Gil Scott-Heron. The talking heads were mesmerized by their apparent influence in helping to spark the “PLAZA FIRE.” This is a nice kumbaya moment to believe that the Twitter generation can overcome autocratic rulers by messaging. However, I think it creates a great deal of danger for those with their bodies in the squares. I am a believer in the need to remove the sclerotic autocrats from power but Egypt was not one of those moments. The military that has run the political machinery in Egypt is still intact and pulling all the strings. It is certainly a feel-good moment for those involved but until real change occurs it is nothing more than rearranging the chairs.

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Notes From Underground: Mubarak delivers the U.S. Foreign Policy Establishment a KY Moment

February 10, 2011

As expected, the Bank of England held the overnight lending rate at 0.5 percent. The POUND held its ground and actually rallied against the other major currencies. The U.K. yield curve steepened a touch but basically rested as it has been very active of late–it widened out with the MPC acquiescing to the recent rise in CPI numbers. The markets will have to wait until February 23 to find out the breakdown of the nine-member panel voting record. In the U.S., the JOBLESS CLAIMS number was much better than expected as the number dropped to a two-and-a-half-year low. The credit markets were numb to this data point as it has been so volatile due to weather-related effects.

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Notes From Underground: Hello? Central Casting, we need experts in market and political hieroglyphics–STAT

January 30, 2011

All eyes have turned to Egypt as the political situation has caught the world’s financial markets off guard. The turmoil in Tunisia was merely a blip on the radar screen but the significance of Egypt is an entirely different matter. So much capital has been thrust at maintaining the status quo in Egypt that many financial analysts have been lulled into a pre-Minsky complacency: Stability breeds a false sense of comfort. The emerging markets have been the repository of the Bernanke QE2 program as low rates have led to the search for higher yields and let potential risk be damned or rather rationalized away by dusting off the models of Long Term Capital Management.

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Notes From Underground: The Land of the Rising Sun needs to Raise More Sons

January 27, 2011

The most significant financial news today was the downgrade of Japanese debt by the ever “prescient” S&P group. It seems that after all these years of government spending and the huge negative impact of deflation on government revenues, the rating agency finally found the fortitude to tall investors that Japanese debt is in need of rebalancing. The markets sold the YEN on the news but the JGBs barely moved and the Nikkei actually rallied a touch, although it is down more than one percent tonight. It must be remembered that the Japanese Debt is 97 percent held by domestic investors so the international impact is not immediately felt like in the Greek and Irish situation.

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