Posts Tagged ‘Financial Times’

Notes From Underground: Martin Wolf/Mr. Fantasy Lays Out The Road For Germany To Exit The EU

May 10, 2016

In tomorrow’s Financial Times, one of the major sycophants of ECB and Brussels policy has raised his “voice” in castigating the Germans for being the source of all the EU’s current problems. Martin Wolf’s op-ed piece, “Germany is the Eurozone’s Biggest Problem,” is a criticism of the German export engine. And it seems to be another source for what appears to be a concerted effort to challenge Berlin’s intransigence over the need for budget austerity before fiscal stimulus. Wolf’s opening salvo against the Germans: “The financial crisis has given it a dominant voice in eurozone affairs. This is a matter of might, not right. Creditor’s interests are important. But they are partial, not general interests.”

My response to this is that Mr. Wolf sets up a straw man with this argument. The Germans MIGHT have evolved because without them GUARANTEEING the promises of President Draghi’s “whatever it takes” campaign to maintain the existence of the EURO, the entire EU project would have collapsed under the weight of its highly questionable ability to honor the debt of what at the time was referred to as the PIIGS: Portugal, Italy, Ireland, Greece, Spain.

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Notes From Underground: Can the Obama Administration Please Find People Who Haven’t Been Responsible For Failed Policies?

January 19, 2012

The Obama Administration has taken recycling way too far. There is a rumor that former economic adviser Larry Summers is a potential nominee for President of the World Bank. Is there no one else besides these retreads who have represented and worked for the FINANCIAL-POLITICAL COMPLEX? Summers is a horrible choice as he has been tainted by his work and exorbitant compensation for several Wall Street firms. The idea that the World Bank president has to be an American is a throwback to the times when it was ok to fight anti-colonial wars around the globe and at the same time using the World Bank’s funds to buy friends and influence people no matter how tyrannical the regime.

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Notes From Underground: Sarkozy Has Overplayed a Bad Hand and It Has Cost Europe

November 16, 2011

It has been the best of times. It has been the worst of times. President Sarkozy began the year with such high hopes and aspirations as he desired to raise his stature on the world stage. He won his early skirmishes against Chancellor Angela Merkel by first defeating Germany’s desire for Axel Weber to attain the ECB Presidency and then forcing the German Chancellor’s hand for a larger pool of capital for the European Financial Stability Facility. But the taste of victory has now faded as the FRENCH BOND MARKET is suffering under the weight of its deeply troubled banks and the GERMAN/FRENCH  10-YEAR BOND SPREAD CONTINUES TO WIDEN. France is deemed to be very vulnerable for its banks own so much EURO SOVEREIGN DEBT that of course is deemed to be riskless and require no haircut or capital to support it.

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Notes From Underground: Sarkozy and Merkel Place Europe On Double Secret Probation

October 10, 2011

It is now official: EUROPE UNDER THE GUIDANCE OF THE TWO DEANS OF PSY-OPS HAVE A PLAN FOR RECAPITALIZING THE BANKS AND BOLSTERING THE EUROPEAN FINANCIAL SYSTEM. The world heaved a sigh of relief that the Sunday meeting in Berlin resulted in a PLAN. The intricacies of what the plan entails are a secret, but for today the markets reacted positively, grasping for any sense of hope. The world’s equity markets reacted as if EURO’s were being air dropped all over the continent. The BUNDS were sold as the reallocation trade sent money exiting the havens in search of risk and the possibility of higher returns … at least for a day.

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Notes From Underground: Unemployment in the U.S.–Does Slowing Jobs Provide the FED With a Pause That Refreshes?

June 5, 2011

The U.S. jobs report provided great support to the bears on Wall Street as the 54,000 nonfarm payroll number led to a sell off in the DOLLAR and another drop in the Dow, S&Ps and all other equity indexes. For all the equity down/dollar up analysts, last week was a breakdown of that temporary correlation. U.S. equities were down more than 2% for the week while the EURO was up 2.5%. It seems that the global financial community is becoming more concerned about a softening U.S. economy and what it will mean for the budget discussions and FED policy.

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Notes From Underground: S&P’s Downgrade … Where’s the BEEF??

April 20, 2011

The markets were roiled by the S&P DOWNGRADE of  the U.S. DEBT  outlook to a “negative” while maintaining the AAA rating. This really could be of no surprise to those who follow the markets closely. The initial reaction was to sell the equities and BONDS. The surprise was that the U.S. DOLLAR was bought aggressively. All of these  trades were short-lived as the S&P closed against recent highs today and the BONDS rallied back immediately on Monday although they have softened with the strength in the EQUITY markets. The DOLLAR was purportedly bid because of the FINNISH vote on Sunday night and of rumors of a GREEK restructuring.

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Notes From Underground: In the Spring OLD GLOBAL MACRO TRADERS’ THOUGHTS TURN TO GRAIN REPORTS

March 30, 2011

Thursday brings the Department of Agriculture report on the prospective plantings for the new crop year and the quarterly grain storage report. In today’s WSJ, there was a piece titled, “U.S. Ethanol Industry May Pare Fuel-Blending Credit.” The readers of NOTES FROM UNDERGROUND know that the ETHANOL SUBSIDIES AND TARIFFS have been a major point of contention for me as I believe that the ethanol price supports have driven global grain prices higher and made a mockery of U.S. trade policy. The article said, “U.S. farmers are poised to increase plantings to take advantage of corn prices.” This is what I have been arguing: The higher corn prices go, the more land farmers take from growing other grains, thus driving beans and wheat and others higher as well. The ETHANOL LOBBY has argued that corn for ethanol is a benign effect … WRONG.

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Notes From Underground: All is well in Ireland as the debt crisis has been resolved–and no corporate tax increase

November 21, 2010

It has been a very slow news weekend. There were no major events, and, if you can believe it, the EU and IMF have agreed to a support package for the Irish banks and other institutions that are under stress. Nobody can really be shocked by this as the readers of NOTES have been prepped as to this outcome. The Irish polity at this point did not have to surrender its sovereignty as it doesn’t have to raise its corporate tax, at least not yet. Markets are responding positively as the S&Ps, EURO and COMMODITIES are all higher as the all-clear signal is given.

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Notes From Underground: Rumors Abound but they are not a mystery to me

August 19, 2010

There are a number of rumors making the markets uneasy. First, there is an array of whispers about meetings in Tokyo in which the MOF and BOJ are going to weigh some type of intervention to curb the rise in the YEN. We have no idea how this would be accomplished, but think it could be through large selling of YEN into the market. However, with the failure of the SWISS National Bank’s efforts, we doubt that the Japanese would do anything so simple.

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Notes From Undeground: David Marsh- Weber is a bad choice to be Europe’s top banker

August 3, 2010

We know that this may be pollution to most people but as long as the air waves and op-ed pages are filled with nonsense, sometimes we just have to respond. David Marsh is somebody we have had great respect for as his book on the Bundesbank is one of the must reads for all those who really want to understand the global macro world. But when we vehemently disagree, we have to raise our “voice.” In today’s Financial Times, Marsh goes through the entire litany of reasons as to why Axel Weber would be a terrible choice to head the ECB. We don’t know what “kool aid” Marsh is drinking, or better, whose water he is carrying but his analysis is devoid of political reality.

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