Posts Tagged ‘Euro’

Notes From Underground: A Question to Ponder

July 5, 2021

Do China and Russia have state authorities investing in the markets?

If the answer is yes then global investors have many issues to consider. The use of massive amounts of leverage (perfectly legal) utilized by Sovereign Wealth Funds and national pension funds have the power to distort prices as much as the involvement by the FED, ECB and BOJ to cause major distortions in the credit markets. Add in the Bank of Canada, Reserve Bank of Australia, the RBNZ and the price of credit is as overvalued as COPPER during the onset of the pandemic.

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Notes From Underground: To Russia With Love (Or Blinken Blinked)

May 23, 2021

Ten days ago, we published a blog post titled, “Sanctions Are Sanctimonious.” And lo and behold, this past week the U.S. moved to remove sanctions on the completion of the NORDSTREAM 2 pipeline, allowing Russian gas to flow freely and readily into Germany without paying the massive transit fees to the Ukraine. This is the culmination of the project promoted by previous German Chancellor Gerhard Schroeder.This story is huge for it shows that the world is — as NOTES portrays it — far more dynamic than the static analysts would have us believe.

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Notes From Underground: Have You All Lost Your Minds?

January 28, 2021

No, I am not referring to the gyrations in the realm of heavily shorted stocks and the attacks by the populace of Sherwood Forest to drive valuations ever higher.

The insanity following Wednesday’s FOMC statement and the Powell press conference leaves me contemplating the works of Kindleberger and Minsky. Complacency in financial markets relying on the kindness of strangers is setting the course for continued madness in all financial asset classes. The POWELL PRESS CONFERENCE YIELDED WHAT OUGHT TO HAVE BEEN THE HEADLINE FOR ALL FINANCIAL NEWS: FED CHAIR POWELL SAYS REAL UNEMPLOYMENT RATE IS 10%.

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Notes From Underground: Central Bank Poker

January 21, 2021

This week, three G-7 central banks had meetings and all decided to CHECK and leave policy unchanged. This was widely expected as there was little reason to UPSET the incoming Biden administration with any idea of currency manipulation. However, the Bank of Canada, Bank of Japan and European Central Bank all discussed the fear of a further slowdown from an increased spread of covid-19.

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Notes From Underground: Thursday In the Park With Louis Gave

January 10, 2021

I had the pleasure of sitting down with Louis Gave last week and we discussed many of the pressing issues facing the global macro world. In May 2020, Richard Bonugli provided the FRA platform as a place to discuss the global outlook with a little bit of FORESIGHT. We HIT IT OUT OF THE PARK. Hopefully, our most recent analysis will provide similar investment outcomes and maybe succeed in clarifying some important issues facing the investment community as 2021 begins.

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Notes From Underground: Never Have Been and Never Will Be

December 21, 2020

… a supporter of Treasury Secretary Steve Mnuchin. In my opinion, he’s another Wall Street hack devoid of any genuine knowledge of the global macro world in which he his sent to do battle on a daily basis. Last week’s decision to label Vietnam and Switzerland as “currency manipulators” is badly timed, badly chosen and badly misinformed. Why would you name Vietnam a currency manipulator when a large part of the Trump administration’s policy is directed toward relocating global supply chains away from China. In addition, labelling Vietnam a “currency manipulator “is an immoral and unconscionable act. Even Bob McNamara is spinning on his “rotisserie in hell.”

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Notes From Underground: The Darkness of Foreign Exchange

December 10, 2020

There were two central bank meetings in the past two days: The Bank of Canada and the European Central Bank. The BOC stayed its current course with no change in policy. Several analysts were looking for more dovish action because of the appreciation of the Canadian dollar but the BOC was wise in noting that a “broad-based decline” in the U.S. exchange rate has contributed to a “further appreciation of the Canadian dollar.” As a result, the BOC has ZERO concerns about its currency appreciating as long as it is BROAD-BASED.

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Notes From Underground: Narcissism Has Consequences

October 1, 2020

On Friday, there’s a new dose of unemployment data. While these blog posts have been infrequent, my view remains the same: The Federal Open Market Committee may be keen on promoting inflation while returning to the pre-Covid employment levels, but no amount of robust jobs growth will move the FEDERAL RESERVE off its current policy of lower for longer.

In regards to the year-end data, I want to know: If unemployment is below 9% while the annualized inflation levels were to rise to 6%, would the FED raise rates? If your answer is no then you agree that the data outcomes are benign. At this juncture much more concerned with the next phase of fiscal stimulus and the DOLLAR.

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Notes From Underground: A Long, Long Time Ago

August 23, 2020

We are back. This is the first blog post after a 10-week break. It has been a nice hiatus from writing as we took some time to reflect and respect the sanctity of motherhood.

I’m linking to an FRA PODCAST hosted by Richard Bonugli taped on Thursday featuring Barry Ritholtz, David Rosenberg and myself. This will be a solid starting point for NOTES FROM UNDERGROUND as it picks up where we left off on June 12:¬† LONG EUROS, LONG GOLD and looking for some vigor in the commodity markets.

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Notes From Underground: Policy Trumps Data

June 6, 2020

The MISS by the economic analysts of Friday’s unemployment data has rendered all data as tertiary relative to the policy that has been enacted to counteract the malicious effects of the Covid-19 shutdown. Global stock markets have rallied as if normalization has occurred and UNEMPLOYMENT has returned to its historic lows of 3.5%.

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