Posts Tagged ‘elections’

Notes From Underground: Welcome Back, Rick

May 28, 2019

On Tuesday, Rick Santelli and I dissected the European Parliamentary elections. The results weren’t far off the projections as the GREEN PARTY was able to siphon off voters from the established left-leaning parties as they attracted more young voters than in previous EU-wide elections. There will be much to discuss as we head into the “horse trading” of Brussels politics but I stick to my insistence that the ECB needs the leadership of Jens Weidmann.

(more…)

Notes From Underground: Elections In Japan, Czech Republic and Italy

October 22, 2017

First: On Oct. 18 I talked with Richard Bonugli from the Financial Repression Authority and financial analyst John Browne, a former member of the British Parliament. I am linking to the transcript of the chat. The conversation was free-flowing and was heavily tilted toward geopolitical concerns and shed light on investment possibilities. But as readers of NOTES well know, many of out best trade outcomes are based on political economy as well as mere yield curves. Last week the 2/10 did challenge the 73.5 basis point level (again) and by Friday the 2/10 had bounced back to 81 basis points.

(more…)

Notes From Underground: A Suggestion for Mario Draghi

December 8, 2014

Three years ago I wrote a blog suggesting that Bundesbank Axel Weber should become ECB President so that the Germans felt they had control of Europe’s monetary policy. My argument was simple: If the Germans controlled the ECB then Berlin MAY BE more willing to support a QE program. As Bernard Connolly argued 20 years ago, the French hoped to gain control of European monetary, thus remove the powerful influence of the Bundesbank. The French have worried that an ECB under the influence of German monetarist restrictions would favor tight money and with it a strong EURO. France and Italy have relied on the ability to depreciate their currencies during times of stress but a Bundesbank-infused ECB would be more reticent to follow the path of least resistance and the possibility of inflation.

(more…)

Notes From Underground: Santelli Exchange — Monetary Policy Missteps

November 17, 2014

Santelli Exchange: November 17, 2014

Click on the image to watch Rick and I discuss global central bank policy missteps.

Notes From Underground: Listen, Do You Want To Know A Secret (Said Yellen to Hilsenrath)???

May 21, 2014

Listen,do you want to know a secret

Do You promise not to tell,whoa,oh

Closer,let me whisper in your ear

Say the words you long to hear  (The Beatles)
Yesterday’s blog post addressed Boston Fed President Eric Rosengren’s interview with Jon Hilsenrath and New York Fed President William Dudley’s effort to communicate how the FED plans to deal with a bloated balance sheet in a “rising interest rate” environment. Today’s FOMC minutes from the April 29-30 meeting addressed just that. The Fed’s uncertainty in its methods has resulted in the need for Janet Yellen to get out front in explaining to the public, and, especially the markets, about the difficult task ahead in shrinking its balance sheet. The closed meeting of the Fed Governor’s ahead of the scheduled conclave was to discuss among a small group of Fed officials the tools that the System Open Market Account (SOMA) had been contemplating and testing.

(more…)

Notes From Underground: A Slow Weekend News Cycle

May 18, 2014

In a weekend of very little financial news the biggest story becomes the announcement by Deutsche Bank that its plans to raise 8 BILLION EUROS ($11 BILLION) in new capital to shore up its balance sheet. (Deutsche Bank closed near its 50-week on Friday at $42.17.) I have had many calls and e-mails about the impact from this news. My response to all has been to wait to see how Deutsche Bank trades tomorrow to see if this is a buy the fact opportunity. It is no secret that DB is the most highly leveraged of all the major global banks so a capital infusion is not a surprise event as Europe undergoes ECB-mandated stress tests. The bottom line is that the DB news will have little impact upon the EURO currency or the BUND market. If Deutsche Bank had failed the upcoming stress tests that would’ve been a major news event. Eight billion euros to shore up its balance sheet is a mere ounce of prevention.

(more…)

Notes From Underground: An Addendum to the German Elections

August 6, 2013

As we await the outcome of the German elections in September, we at Notes From Underground would like to point out  a few posts in which we alluded to the German elections. The first one is from June 2010, after the defeat of Chancellor Merkel’s candidate for German President, Christian Wulff.

The revelation: she leaves a sour taste in the mouths of Germans.

Chancellor Merkle’s hand-picked candidate for German president, Christian Wulff, did not receive a majority of votes in the 1,244-member assembly of federal lawmakers–similar to the electoral college in the U.S.–and will have to go on to further ballots. Wulff had 600 of the needed 623, thus keeping the opposition candidates alive. If any of the candidates fail again to achieve the needed majority, then the process goes to a third ballot in which the candidate with most votes wins.

We believe that Merkel’s candidate will prevail but the failure on the first vote is a slap at the chancellor. The meaning of this slap is that it makes the German Government bailouts of the PIIGS that much more problematic as the German public is growing tired of sending its money to the profligate. The internal opposition to further bailouts is the real threat to sovereign solvency within the EU. It is not the strikers in the peripherals, as significant as that may be, but the rise of opposition in Germany to sustained money transfer. We continue to say that the real TEA PARTY people are in Germany and there in lies the rub. We also note that the EURO has held up very well today in spite of this news. However,  one day on month-end/quarter-end doth not make a trend but does reflect on the U.S. DOLLAR. The problems in the developed world are immense –no nation seems to have escaped. It’s just a matter of what seems to be the flavor of the day.

In a more recent post from April 28, we said, “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?” Click the link below for a refresher while we wait for the listless markets to wake.

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

Notes From Underground: The only TRU-MAN about the DOLLAR is ex-CEA head Christina Romer

May 23, 2011

In an effort to stay abreast of news and markets while in Boston, the two most interesting items on the global financial stage are causing a push/pull in the market. The Spanish elections certainly impacted the markets. Weakness in the EURO began on Friday as Bloomberg ran a story about the sad state of municipal finances in Spain that would be revealed after the Socialists lost most previously held local governments. It seems that the Spanish authorities have been fudging their local municipal finances and this will put more pressure on Spain to enact austerity budgets even with an unemployment rate above 21%.

(more…)

Notes From Underground: Franco/German spat ahead of this week’s SUMMIT of LOVE

March 23, 2011

This Thursday and Friday the European Union had hoped to put the finishing touches on the European Stability Mechanism that will go into effect in 2013. The Sarkozy/Merkel-crafted plan would give succor to Chancellor Merkel ahead of this Sunday’s elections in Baden-Wurttemberg and hopefully halt the German voters’ antipathy toward all things EU. However, there appears to be friction between the giants of the European Union. Sarkozy is reportedly furious at the Germans for abstaining on the UN vote to impose a no-fly zone in Libya. Also, the French believe that Frau Merkel played politics and an anti-French card by moving to halt electricity production at seven NUCLEAR POWER plants, thus making the French look bad as well as having the impact of driving up electricity prices.

(more…)

Notes From Underground: This week’s main events-elections, FOMC, unemployment

November 1, 2010

The slew of U.S. data has been a mixed result. The personal spending and earnings number were both soft, while the PMI manufacturing number was better than anticipated. Equity markets shrugged off the weaker data as the market closed higher, although far off the early highs in the S&Ps and even traded lower late in the day.

(more…)