Posts Tagged ‘finreg’

Notes From Underground: Jackson Hole is where the market focus will be … and Bernanke the main act?

August 25, 2010

It has been written in many domains that the speech to watch will be the paper delivered by Raghuram Rajan and Bill White. What will they say? We don’t have a clue but they are being given a great deal of pre-speech attention. Why? They have been proven prescient in their early views on the danger of asset bubbles and predicted the housing crash. Alan Greenspan belittled their work in 2005 and that is all we need to know. Even Bernanke, who was skeptical of the possibility of pricking asset bubbles, has given Professor Rajan much more respect than he previously did so will be particularly attentive to these two academics and the work they present.

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Notes From Underground: The peripheral nations are trying to get ahead of the inflation curve … with CAUTION

July 29, 2010

Last night, the Reserve Bank of New Zealand raised the overnight interest rates as expected from 3.00 percent from  2.75 percent. This was no surprise as the market widely had anticipated it. The move by the Central Banks of India and Israel was also expected, although the probabilities of the Israeli move were less than the others. So New Zealand raised rates and the currency was sold off, which has significantly weakened on the crosses. The market had a very negative reaction to RBNZ Chief Alan Bollard’s very cautious comments about rates going forward. With KIWI inflation running at an annualized rate of 2 percent, the RBNZ feels it is now ahead of inflation and will watch global growth and see how it effects New Zealand. Bollard expressed concern about the recent strength of the Kiwi and in his statement said:

“The New Zealand dollar has appreciated in recent weeks.This appreciation is inconsistent with the softeningin the New Zealand’s economic outlook …”

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Notes From Underground: The Brothers GRIMM and other fairy tales

July 14, 2010

We have word from Europe that the stress tests done on their regional banks will be fair and transparent. Do we believe that to be possible? No way, no how. The stress tests will be dependent on the questions asked and if the DESIRED OUTCOME is already known, then the questions are, of course, self-fulfilling. Right or wrong, the elites of Europe are too vested in the EU project to let any genuine tests bring this “edifice” tumbling down. Helmut Kohl often opined that the major purpose of the EU was to secure the blessings of peace for its children and grandchildren. This dream will not die easily–noble ideas seldom do.

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Notes From Underground: G-20 is waste of time and energy; finreg is just a waste

June 27, 2010

Germany added liquidity but it was all directed at the British goalie David James–nothing austere about their World Cup peformance. The news from the G-20 was as expected: Nothing short of a waste of time and the resulting communique will be the paradigm of vacuousness. The Chinese took center stage in that they spoke up for the developing nations, stating they wanted input in the discussions about global problems. We agree with the Chinese that the G-8 is an atavistic appendage of a past colonial world and is merely the delusional forum for those wishing to hold onto a past that left the arena long ago. Yes, we are sure that Russia, Brazil and the others that make up the most robust members of the emerging world want to advise the likes of Italy, Spain and France who have certainly failed to get their own economic houses in order.

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