It is a great honor to feature another podcast with Peter Boockvar for The Financial Repression Authority. Peter is certainly one of the regular commentators that I watch with great interest whenever he is on Bloomberg, Fox Business or CNBC. I think we cover much of the global financial landscape. While it may run long, it is a lot easier than reading a 20,000-word blog post. Pour the scotch and give it a listen.
Posts Tagged ‘France’
Please Donald, will the POTUS STFU, PLEASE. This is not a political statement. It is free advice because the more you communicate the less impact you will have. You may be trying to use the bully pulpit to jawbone the DOLLAR lower but every tweet diminishes your influence. Peter Navarro tried to create a weaker dollar but you have lessened the impact of his misinformed missives. Historically, jawboning has had a short-term market effect, but your late-night 140 character references are losing the power to persuade. You must learn that words are like your campaign sexual references, less is more. SO PLEASE, STFU.
One of the most important indicators for financial markets is yield curves. They are predictive as they have historically shown coming economic turmoil, or, more importantly, the end of a business cycle. The severity of any recession depends on the amount of debt that has preceded the onset of an economic slowdown. I will remind readers that before the 2007-08 financial crisis, the U.S. 2/10 curve actually INVERTED to NEGATIVE SIX BASIS POINTS. Some financial pundits like to cynically advise consumers that the STOCK markets have predicted 10 of the last 5 recessions, but that is not so with yield curves. The difficulty with the signalling mechanism of yield curves is predicting the time for even during the GREAT RECESSION equity markets continued to rally even as the curve flattened.
This week brings Prime Minister Abe’s fiscal plan, the Reserve Bank of Australia’s rate decision, the Bank of England’s monetary results and U.S. nonfarm payrolls on Friday. So let’s put some perspective to tonight’s main events. The RBA will announce its overnight interest rate and consensus is calling for a 25 basis point CUT to 1.5%. Analysts believe that the weakness in the natural resource sector is aiding the reduction in capital expenditure. Also, Aussie inflation is at the bottom of the RBA‘s target range, which provides rationale for the RBA. I am not so sure of a CUT for this is coming at the end of Governor Stevens’s term at the RBA. Dr. Phillip Lowe will take over September 16 so this is the penultimate meeting for Mr. Stevens.
“There ain’t no room for the hopeless sinners,
who’s hurt all mankind just to save his own,
have pity on those whose chances grow thinner
’cause there’s no hiding place from the kingdom’s throne.”
The sentiment is aptly described in this song but also in Niall Ferguson’s book, “War of the World.” In the book, Ferguson explains that European bond markets were initially unfazed at the start of World War I. They traded at a steady valuation, even as the troop trains were heading for the front.
While attempting to enjoy Pittsburgh (and hopefully a Cubs game), the markets buzzing about the U.S. Treasury’s report about the “Trade facilitation and trade Enforcement Act of 2015.” In a Bloomberg News article published late Friday afternoon, “U.S. Places China, Japan, Germany on New FX Monitoring List,” it seems that the Treasury and Jack Lew are raising the threat of retaliation against nations that meet the Congressional crafted criterion of currency manipulation. These include: 1. Significant bilateral trade surplus with U.S.; 2. Material current-account surplus; and 3. Engaged in persistent one-sided FX intervention. The issue of “one-sided intervention” is defined as only weakening a currency by conducting repetitive net purchases of FX amounting to more than 2% of its GDP.”
Notes From Underground: The Emptiness of the Chattering Classes, Opining On Everything With Vacuous ThoughtMarch 14, 2016
The main political news of the weekend was the falling electoral support of German Chancellor Angela Merkel in the three regional elections. The refugee issue continued to be the theme of voter discontent, according to the script presented by the nattering nabobs of nonsense. I have written that the financial repression foisted upon the German saving class was going to be a problem for Chancellor Merkel as insurance and pension funds were being punished in an effort to bail out the peripheral banks and ultimately the heavily indebted governments of the non-German core countries. Unlike the U.S., which has some political input on the role of the Federal Reserve, the German electorate is subjugated to a central bank over which it has no authority.
I know, I know. The clash of civilizations is purportedly about the struggles between the Islamic World and that of Judeo-Christian-based beliefs. But from our global-macro perspective it is the open battle between France and Germany for domination of the EU State. It has always been about the which of the two nations was going to control the European agenda. [NOTE: PLEASE GO BUY A COPY OR TWENTY OF THE ROTTEN HEART OF EUROPE BY BERNARD CONNOLLY FOR SALE FROM AMAZON AT $8.00 or directly from me for $10.00 including shipping.] For the past five years Germany has been the dominant voice in Europe because of the weakened condition of the southern European nations who were burdened with massive debt loads following the 2008 financial crisis. In 2011, French President Sarkozy prevailed over German Chancellor Merkel by installing Mario Draghi as ECB President rather than the hard-money Bundesbanker Axel Weber. The Sarkozy victory came at a steep price, German intransigence over the budgets of the debt-burdened European nations. If MONEY WAS GOING TO BE CHEAP, THEN FISCAL AUSTERITY WOULD BE THE PRICE FOR INSURING BERLIN’S ACQUIESCENCE.
Let me say first off: I agree with President Obama about putting massive boots on the ground in response to the ISIS threat. I felt the same about Afghanistan in that the U.S. ought to have fully utilized the special forces in a tactical manner to determine when and the place of our choosing to do battle with a non-conventional adversary. The U.S. special ops are a potent disruptive force and when supported with the cavalry and other forms of airpower can inflict great harm. The recent acknowledgement that A-10 Warthogs have been dispatched to INCIRLIK Airbase in Turkey signifies the U.S. has the ability to severely damage the mobile capabilities of ISIS and thus limit the scope of the battlefield and enhance the effective use of U.S. Special Forces. The success that this type of operation had in the early part of the battle against the Taliban when the Special Ops allied with the indigenous Northern Alliance.
It is appalling that even political leaders are in such a hurry to gain recognition that they rush to put out tweets like any movie star or music artist in an effort to gain followers. The British prime minister rushed out this superficial bout of pabulum: “I am shocked by events in Paris tonight. Our thoughts and prayers are with the French people. We will do whatever we can to help.” This is what the leader of a nation with armed forces at his disposal rushes to send out to the world. It is so vacuous that mere words cannot measure the low esteem in which I hold the reigning British leader.What next? Selfies with tears pouring down his cheeks in order to show the French people how truly saddened are the Brits and how those across the channel feel the pain caused by the millenarian nihilists.