We have all been bogged down with tweets coming from the White House about China. Because high-speed traders force us to parse the messages and assess the immediate impact on the markets, we’re hostage to President Trump’s tariff policy. The bottom line is that Robert Lighthizer is left to inform the world when China will acquiesce to the U.S.’s demand for reliable and hardened enforcement mechanisms to solidify any genuine agreement. From my perspective, the critical point on global markets is that once China/U.S. trade agreement is done the president will set his sights on targeting the ENORMOUS TRADE IMBALANCE that favors Germany.
Posts Tagged ‘Euro/Yen’
Notes From Underground: Some Issues to Contemplate
January 16, 2018On Tuesday, Rick Santelli and I spoke, and, as usual it was way too short as we couldn’t cover anything in the depth we would’ve liked. Regardless, it allows us to get out front of many investment ideas. Rick has a stable of high quality guests: Bianco, Boockvar, Biderman, Trichet, Lazear … the list goes on and sometimes I wish my readers would let CNBC know how important Rick is for a larger discussion about ideas besides the most recent Apple price and latest Trump tweets.
Click on the image to watch me and Rick discuss the euro and the central banks.
Notes From Underground: Feeding the Ducks When They Quack
January 9, 2018Since the unemployment data, I have tried to write an appropriate blog but “all my words came back to me in shades of mediocrity” so I refrained from adding to the stream of vapid commentary that fills the Internet. But let’s proceed as the markets provided movement based on some sense of heightened inflation expectations. There is certainly money flowing into commodity based investments as OIL, COPPER, GOLD, and a litany of other natural resources have become a repository for money concerned with investments other than crypto currencies. The U.S. employment data was well within the range of expectations. The important average hourly earnings and the average work week were close to the consensus forecasts. The Canadian data beat estimates for the second consecutive month. The consensus was for an unemployment rate of 6% and addition of 2,000 jobs. The actual data was 5.7% unemployed and almost 80,000 new jobs, with two-thirds being part-time.
Notes From Underground: Angie, Angie (As Told By the Rolling Stones)
September 25, 2017Mick Jagger was prescient when he sang these words in 1973:
You can’t say we never tried
Angie, you’re beautiful
But ain’t it time we say goodbye
Angie, I still love you
Remember all those nights we cried
All the dreams were held so close
Seemed to all go up in smoke
Let me whisper in your ear
Angie, Angie
Notes From Underground: German Elections. The Sound of Complacency Shattering?
September 24, 2017I will start tonight’s BLOG with two very good comments from a long time reader and contributor GREEN AB who hails from Germany. Green has always provided great insight and though we don’t always agree I have great respect for his perspective. On Thursday he posted a very prescient forecast about today’s election and Sunday he followed with a post-election thoughts.
Notes From Underground: A Take On Mario Draghi in Two Parts
September 10, 2017Part 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.”
Notes From Underground: G-20 Photo Ops Become Relevant … For a Moment
July 10, 2017All 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.
Notes From Underground: Happy Memorial Day, A New Podcast from FRA
May 29, 2017I 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.
Notes From Underground: Mario Draghi Declares War On German Economic Policy
October 22, 2015In 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:
Notes From Underground: As We Await the Day of Judgement
September 10, 2015This 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.”