Posts Tagged ‘European Union’

Notes From Underground: When the Paradox Of Thrift Doesn’t Apply

August 25, 2019

John Maynard Keynes’ critical theory said in times of uncertainty economic actors tend to save more, which leads to a negative feedback loop that slows the economy as demand shrinks. This is why governments need to increase fiscal stimulus to boost demand. It’s too bad that President Trump doesn’t exercise the paradox of thrift when it comes to WORDS. Let there be no mistake: We at NOTES have been expecting a response from Trump like this.

(more…)

Notes From Underground: Oh, When Will They Ever Learn?

November 28, 2016

This is a tough POST to write  for I will criticize a newspaper I have read every day for at least 30 years. (In fact, I still have it delivered on my doorstep and read most of it online in the evening before the hard copy arrives.) The London Financial Times had a front page story, “Troubled Italian Banks Face Fresh Risk of Failing If Renzi Loses Vote.” This is a deplorable headline for it harkens back to the days of the mainstream media warning of dire consequences if Brexit passed and the Trump was elected president. THIS IS SCARE MONGERING. It raises the question: When will the Davos crowd EVER LEARN?

(more…)

Notes From Underground: Janet — Klaatu Barada Nikto (The Day the Earth Stood Still)

July 29, 2014

Tomorrow is a big day for disseminating information with market-moving potential. The market is bored with war, pestilence and famine so it must be FED pronouncements and GDP data that can provide a volatility boost. The markets did twitch today as the European Union and the U.S. both upgraded the sanctions against Putin’s Russia. It will be very difficult for Russian banks and large energy consortiums to raise dollar- and euro-based capital. Even with the advent of new and improved sanctions the global equity markets barely moved, especially as corporate earnings in the U.S. continued its string of “beats.” The counter to the continued strength of the equity markets is the behavior of the global debt markets as European sovereigns from Spain to Germany have reached record low yields. The U.S. yield curves continue to flatten as investors continue purchasing 10- and 30-year debt driving long-term yields lower. Again, I will state that while the curves are flattening the 2/10 U.S. curve is not historically flat.

(more…)

Notes From Underground: The Market Looks to Germany and Japan

February 9, 2014

Yes, the U.S. unemployment data grabbed the headlines on Friday as the non farm payroll headline number was lower than consensus again. More importantly, the revision to the very weak December payrolls of 74,000 jobs was only revised upwards by 1,000. Average hourly earnings and hours worked were also weak and after the initial drop in the stock indices, equity markets spent the entire day rallying. It seems weak data powers the equity markets’ understanding of the Fed’s forward guidance. Tapering is not tightening and the Fed will keep rates low for a very long time and let the 6.5% unemployment threshold be a mere “candle in the wind.” The Canadian data was better than expected but did substantiate Thursday’s strength in the IVEY PMI. The strong global equity markets were also supported by diminished fears from the emerging markets as investors have lost the sense of urgency to flee all EMs.

(more…)

Notes From Underground: More Questions Then Answers … Tapering Foreshocks

November 12, 2013

The fools are alive with the sound of tapering. There’s a constant drone of the CNBC crowd that the fear of Fed tapering has sent emerging markets to nine straight days of losses. While the emerging markets have been responding negatively to tapering, the developed markets have been making new highs. So it seems that the FED removing liquidity will be far more detrimental to the emerging markets than to the developed world’s equity markets. A quick snapshot of the tales of two markets reveals the divergence taking place in the global financial markets. The Mexican ETF EWW is down 12% on the year while the S&Ps are up 27%. Yet, the Mexican economy is heavy dependent on the U.S. market for a large percentage of its exports. If the U.S. consumer is healthy enough to help the U.S. equities to a solid gain on corporate profits, how can the Mexican financial markets be so negatively divergent? It is not only the issue of economic growth but also the health of the overall financial system.

(more…)

Notes From Underground: Let The Markets Reveal Their Resolutions

January 2, 2012

The “MARKET” will resolve to test the GRIT of traders and investors as the mysteries of politics and economics collide to make the daily lives of traders difficult, to say the least. In 2011, the markets left traders and various investors sleeping like babies as we were relegated to getting up every hour to cry. We must remember that the market’s “JOB” is to  cause as much heartache and pain to as many people as possible as money seeks to attain a positive return Last year the market was in its full glory as it caused some of the world’s foremost global macro investors to be humbled in a capacity not seen since the credit market debacle of 1994-95. This year seems to be of a similar ilk as the travails of the EUROPEAN UNION will continue to weigh upon the flows of global capital.

(more…)