Posts Tagged ‘Euro/Yen’

Notes From Underground: A Take On Mario Draghi in Two Parts

September 10, 2017

Part I: Mario Draghi, the master of obfuscation was at his best Thursday as he dodged MULTIPLE questions about the recent STRENGTH in the euro. Journalists were very well prepared and even threw back Draghi’s previous responses about how a 10 percent currency appreciation would lower inflation measures by 0.5 percent. But Draghi met each question with a, “Yes, we discussed it as some members of the ECB Board were concerned about the EURO and its impact on exports and import prices.”

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Notes From Underground: G-20 Photo Ops Become Relevant … For a Moment

July 10, 2017

All of the words and photos emanating from Hamburg are figments of the media’s confirmation bias. In Monday’s Financial Times, Wolfgang Munchau had a splendid op-ed titled, “From Brexit to Fake Trade Deals–the Curse of Confirmation Bias.” Munchau calls out the Euro-Japan trade deal headlines for as he points out it was announced on the eve of the G-20 summit in order to embarrass President Trump. I laughed when I read the stories about the aforementioned trade agreement because while EUROCRATS presumed a signed agreement, the FACT is each EU state will have to approve the agreement. So the acrimony from the Euro/Canada trade agreement still reverberates.

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Notes From Underground: Happy Memorial Day, A New Podcast from FRA

May 29, 2017

I am posting a new FRA podcast that was recorded May 24 with Richard Bonugli. We cover many important topics, including the rise of Bitcoin as an investable product. As I have said often, I need to learn more about crypto-currencies and their impact on the global financial system. Unlike Ben Bernanke, I understand GOLD but am seeking to understand BITCOINS. I am striving to learn the workings of the block chain mechanism and relying on the wisdom of one of favorite readers and supporters American Limey.

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Notes From Underground: Mario Draghi Declares War On German Economic Policy

October 22, 2015

In the ECB press conference held today in Malta, the market heard what they wanted to hear and settled in on the idea that Draghi was all set to increase the QE program and/or use the tool of negative interest rates to bring inflation up to its mandated level of 2 percent. The EURO dropped more than two percent after the Draghi press conference began as investors believed that the ECB was intent on increasing its asset purchases by the December meeting. I listened to the entire press conference but was reticent to draw that conclusion. The markets’ response to the possibility of any enhanced ECB actions poses more questions than the pricing action resolved:

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Notes From Underground: As We Await the Day of Judgement

September 10, 2015

This Sunday begins the Jewish Holiday of Rosh Hashanah, which brings on a very solemn 10-day period of deep introspection as God judges the entire world for the coming year. So a very happy, healthy and prosperous year for all readers of Notes From Underground. Following the Monday and Tuesday’s days of reflection we come to the financial market’s judgement day, the Fed’s decision on interest rates. Let’s be as patient in reacting as the FED has been in raising interest rates. Will the FED act to raise rates and disregard all its fears of market turmoil? The FED has a poor history of making firm decisions in the face of creating violent market reactions. The Bernanke Fed failed miserably in an attempt to end QE, cowering in the face of the “taper tantrum.”

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Notes From Underground: Ricky and Yra Down By the Schoolyard

June 2, 2015

Mr. Santelli interviewed me today and the topic evolved into Christine Lagarde and the IMF. The conversation was based on previous blogs as we discussed IMF culpability in the Greek debt crisis. The Santelli Exchange is linked below (click on the image). Also, I would advise reading the comments on the previous blog, especially the words of wisdom from University of Illinois finance professor Kevin Waspi.

Yra & Rick, CNBC, June 2, 2015 (more…)

Notes From Underground: It’s An Infamnia

May 21, 2015

As we come to the Memorial Day holiday, the markets are still focused on Greece; the Fed’s desire to raise rates (or not); the ECB and its new policy of front loading its bond purchases to deal with the low volume of the summer months; China’s slowing growth; and the regular array of global macro concerns from politics to the continued role of central bank liquidity programs and the continued impact of QE on global asset prices. Tonight, the Bank of Japan will announce its interest rate decision and it seems that Governor Kuroda will keep the present policy in place: NO RATE CHANGE AND NO INCREASE IN ASSET PURCHASES.

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Notes From Underground: Shinzo Abe to the American People … Now This Is A Mandate

December 16, 2012

The Japanese LDP and its partner the New Komeito Party have seemingly captured more than the 320 seats needed to override the upper-house on most legislation. The two-thirds majority garnered by the ABE COALITION will give the LDP enough power to put pressure on the BOJ to attempt an effort to end the deflation that has encumbered the Japanese economy. The campaign issues promoted by the victorious coalition should lead to further weakening of the YEN although we may see a bout of profit taking as the rumor has become fact. Mr. Abe had promoted the ending of BOJ independence but it is doubtful that promise will be realized. The overall response to the end of central bank independence may unleash a response bigger than the LDP will want to confront. The global financial world have become very supportive of central banks being independent of government control and it seems more likely that PM Abe can influence policy in other ways.

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Notes From Underground: The Reign of Terror is Over as Maximilien Robespierre TRICHET is Slain

November 3, 2011

Today the new President of the ECB, Mario Draghi, established himself as a true leader and moved to undo the damage of the ├╝ber arrogant Jean Claude Trichet. The two rate increases in the last six months by the European bank were an overshoot of mammoth proportions as the peripherals were in the midst of a severe credit crisis and moving toward austerity budgets. Spain, which maybe in the worst condition of all–21.5% unemployment and a deflating housing market–was not in need of a EURIBOR increase as its mortgage rates float in reference to the bank rate. If Trichet did not understand the depths of the credit crisis then he should have never been the ECB president. It was always reported that the ECB decisions were unanimous, but today’s move by Draghi indicates that Mr. Trichet rode roughshod over the bank’s policy making for it was reported that it was a 25 basis point decision by unanimous consent.

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Notes From Underground: Watching the Numbers From CME (CNBC)

November 1, 2011

Watch Rick Santelli and I discuss EURO/YEN and Italian bond futures.