Posts Tagged ‘ESM’

Notes From Underground: Elections, Court Rulings, and Other Tales of Ordinary Madness

September 10, 2012

The markets were suffering from fatigue as they struggled to digest the liquidity driven rally of global assets last week. This week will not provide respite as the financial world awaits the outcome of three potentially major market-moving events. The first mover will be the ruling by the German Constitutional Court (GCC) in Karlsruhe as the HIGH COURT will determine if the ESM established by the EU as a bond buying mechanism is in breach of Germany’s basic law, in that the ESM undermines the fabric of German politics by consigning the BAVARIAN BURGHERS to the credit responsibility of the EU profligate states. It seems that the COURT must deal with the concept of “TAXATION WITHOUT REPRESENTATION” as the transferring of German wealth to the European treasury needs to be done by the Bundestag and not by mere cabinet decision or by the complicity and complacency of the central bank.

(more…)

Notes From Underground: It’s Raining Liquidity All Over the World

September 9, 2012

Friday’s unemployment report solidified the TRIFECTA of LIQUIDITY for the week. ECB President Draghi seeded the “liquidity clouds” at Thursday’s press conference by announcing the installation of the OTM (outright monetary transaction), which will allow the ECB/ESM to purchase unlimited amounts of sovereign debt of up to three-year duration–of course with conditions for those asking for help. Draghi is hoping to buy the whole EU project enough time so that a FISCAL UNION CAN BE FORMED WITH THE ABILITY FOR THE EU TO ISSUE A TRUE EUROBOND.

(more…)

Notes From Underground: WHO’S IT GOING TO BE, HIM OR ME?

August 20, 2012

This seems to be the question of the day as the markets awoke to the RUMORS of the ECB CAPPING RATES. As I wrote last night, the rumors were running wild about the ECB using different strategies to put a ceiling on short-term debt (90 days to 3 years for Spain and Italy). No genuine plan was offered just several possibilities as it seemed that President DRAGHI was floating trial balloons about ECB intervention via an unlimited ECB/ESM buying of “misaligned” sovereign debt. The EUROPEAN SOVEREIGN DEBT MARKETS responded to the weekend stories by initially rallying the ITALIAN DEBT FUTURES AND SELLING GERMAN BUNDS IN A MAJOR RELIEF RALLY.

(more…)

Notes From Underground: Irony of Ironies … In the Land of Fiscal Austerity and Budget Cutting Circumcision is Outlawed

August 13, 2012

The news is so slow that some ridiculous headlines just creep in, but I wonder what the Greeks think. If the fiscal sheriffs from the TROIKA only took the tip it wouldn’t have been so bad but the German creditors took the entire reproductive assemblage. Ok, enough. New word out of Germany is that a Berlin-based think tank has filed a new case against the legality of the ESM but is asking the Federal Constitutional Court to allow the EUROPEAN COURT of JUSTICE (ECJ) to hear the case and decide if the stability mechanism is legal under EU law. The Eurosceptic group EUROPOLIS is asking for European to determine the legal status of any European bailout program.

(more…)

Notes From Underground: Schaeuble Proves Why 2+2=5

July 25, 2012

In the realm of loving and promoting the irrational over the rational expectations of the MODEL BUILDERS, there is no better poster child than German Finance Minister Wolfgang Schaeuble. As I warned Mario Draghi to unpack his speedo, today BLOOMBERG NEWS ran an article, “SCHAEUBLE DECLARES MARKETS WRONG AS EUROPE COASTS INTO VACATION.” This is the German finance minister who has the audacity to proclaim that the markets are wrong and head off for vacation. It seems that the German hierarchy is convinced that all is well because the BUND market is healthy. Is Schaeuble so naive as to think that strong BUNDS reflect the health of Europe? Don’t German policymakers understand that the BUNDS and SCHATZ are at absurdly low levels because many other Europeans are “packing their suitcases” with EUROS so as to transfer their wealth to the perceived safety of the German financial system and thus for its haven status? It is astounding that the EUROCRATS believe that the markets will wait for the decision makers to return before any further market action will take place.

(more…)

Notes From Underground: FOOD FOR THOUGHT–GRAIN EXPORTS FORCE MAJEURE

July 11, 2012
First: The German Federal Constitutional Court (FCC) has put off an immediate decision on the constitutionality of the ESM, so the market has some breathing room and FINANCE MINISTER SCHAEUBLE has some time to define exactly what the Merkel government has signed on to. The EURO held steady today as the attention turned to the U.S. and the FOMC minutes.
(more…)

Notes From Underground: SCHAUBLE Says Spain On The Road To Salvation (IS 25% UNEMPLOYME​NT REPENTANCE​?)

July 9, 2012

First, the U.S. unemployment report was soft although if the ADP stats had not caused the WALL STREET ECONOMISTS to revise their guesstimates upward, the NFP would not have been such a miss from the early consensus. The average hourly earnings were above projections and while MANUFACTURING JOBS were up only 11,000, it was not a negative number. Although it wasn’t a robust number, it certainly wasn’t a huge miss from projections.

(more…)

Note From Underground: Mr. Bernanke Meets the House Budgeteers

February 2, 2012

Sound bites from the left. Sound bites to the right; here I am, stuck in the middle with you (STEALERS WHEEL). The House Budget Committee was in full political regalia as posturing  for the home folks and November’s election was in full force. Most of the questions are redundant or ridiculous and in some cases, both. An exception was Committee Chairman Paul Ryan, who asked Mr.Bernanke if the FED‘s policies had corrupted the BOND markets that they stopped sending a credible signal. It has been a consistent theme of NOTES that the BOND market is broken as an indicator of inflation expectations because the FED‘s large scale asset program has created an artificial support to LONG-TERM BOND PRICES.

(more…)

Notes From Underground: In the Battle of the European Balance Sheet Bulges, Cameron Says “NUTS”

December 11, 2011

Almost 67 years ago, U.S. General McAuliffe told the German command that the U.S. forces at Bastogne would not surrender and actually said it in a one-word response: NUTS. In a parallel response to German/Franco demands that all European nations surrender their sovereignty by succumbing to a “FISCAL COMPACT”, British Prime Minister David Cameron basically said the same as the U.K. moved to cast a veto vote on the proposals that resulted from the European Summit.

(more…)

Notes From Underground: Let’s Make A Deal … But Will It Be The Full Monty?

July 31, 2011

DON’T SPEAK TOO SOON
FOR THE WHEEL’S STILL IN SPIN
AND THERE’S NO TELLIN’ WHO
THAT ITS NAMIN’
FOR THE LOSER NOW
WILL BE LATER TO WIN
FOR THE TIMES THEY,
THEY ARE A-CHANGIN’

The markets have greeted Sunday’s purported U.S. budget deal with a great sigh of relief as the S&P futures have opened 1.5% higher. At this moment it is difficult to determine what exactly has been agreed. It seems that Boehner was able to placate the “TEA PARTY” caucus for the moment–enough to get some compromise.

(more…)