As the Italian political situation maintains a boil, the elites of the Davos clique are out in full force trying to calm markets. The only problem is that established elites are so removed from reality that every move they make results in more turmoil. The airwaves were full of establishmentarians portraying themselves as conciliatory but their analysis of the economic consequences of the Italian election outcomes are similar to Ben Bernanke’s claim that the housing crisis was contained in early 2007. Let’s review some of today’s inane comments and analysis:
Posts Tagged ‘George Soros’
Notes From Underground: Alfred E. Neuman or Arthur Fonzarelli? Pick Your Poison
June 9, 2016Since I’m 62 years old, my references of social icons goes back to a more simple time. Alfred E. Neuman of Mad Magazine fame would ask, “What, Me Worry?” The other side of the equation would be Arthur Fonzarelli from the television show, “Happy Days.” who would stutter before ever admitting that he was WRONG. The world’s central banks are a reflection of these two icons. It seems that Yellen, Draghi and Kuroda all suffer from both views. They have nothing to worry about and they certainly cannot admit to being wrong. The central banks are under attack from investors and traders for pursuing quantitative easing and negative yields even though the efficacy of such programs is certainly in doubt.
Notes From Underground: George Soros In the Time of Draghi
April 28, 2014The financial world is awash in opinion on the overvaluation of the EURO. Even ECB President Mario Draghi has hinted that he is concerned about the deflationary impact of an overly strong European currency. It makes one think: George Soros solidified his position as the master of investment by breaking the Bank of England’s effort to hold the British pound at a pegged level that the market had determined was absurdly high. The PEG level was to be defended even it if meant bringing the U.K. into a very painful recession. The BOE even went so far as to raise overnight interest rates to 15 percent in an effort to raise the cost to speculators betting against the POUND. Rates were being raised even as the U.K. economy was in the midst of a slowdown. In a day known as Black Tuesday, the BOE and the Exchequer capitulated to market forces, in which George Soros held the largest position, and Britain stopped defending the indefensible. In two years time, the U.K. was in recovery mode with a devalued POUND and lower interest rates, while the remaining European nations tied to the Deutschmark peg were struggling to find economic growth.
Notes From Underground: May Day! May Day! May Day!
April 30, 2013The international distress call is going out from Europe as the overall eurozone unemployment rate reached 12.1%. Germany had a low rate of 5.4% while Spain was more than 27%. So how is the ECB to do deal with the huge discrepancy between the economic performance of its 17 members? If the austerians are being relegated to economic purgatory then the pressure on the ECB to act will be diminished. Cutting rates for the sake of a show of action will be a detraction from the bigger political issue. Why irritate the Bundesbank and Chancellor Merkel by moving the ECB lending rate by a measly 25 basis points?
Notes From Underground: For That Was Yesterday and Yesterday’s Gone (Chad and Jeremy)
April 16, 2013What ailed the markets yesterday seems to have moved to the back pages and the equity markets recovered most of their losses. Gold and silver staged very tepid rallies considering the massive selling that took place during the past week. The global equity markets are still comfortable with central bank policy and even a terrorist attack on U.S. soil cannot shake of confidence of investors seeing high profits, low inflation and no alternative to the returns on equity. It is an old theme but when a market continues to discount unfavorable data and news the power of momentum is in full bloom.
Notes From Underground: Elections, Court Rulings, and Other Tales of Ordinary Madness
September 10, 2012The markets were suffering from fatigue as they struggled to digest the liquidity driven rally of global assets last week. This week will not provide respite as the financial world awaits the outcome of three potentially major market-moving events. The first mover will be the ruling by the German Constitutional Court (GCC) in Karlsruhe as the HIGH COURT will determine if the ESM established by the EU as a bond buying mechanism is in breach of Germany’s basic law, in that the ESM undermines the fabric of German politics by consigning the BAVARIAN BURGHERS to the credit responsibility of the EU profligate states. It seems that the COURT must deal with the concept of “TAXATION WITHOUT REPRESENTATION” as the transferring of German wealth to the European treasury needs to be done by the Bundestag and not by mere cabinet decision or by the complicity and complacency of the central bank.
Notes From Underground: Why Is It That Angela Merkel IS the DESIGNATED DRIVER FOR WORLD FINANCE??
June 26, 2012The G-20 meeting in Mexico resulted in Chancellor Merkel being the PINATA for the other 19 guests as they beat her with the stick of moral certainty. U.S. Treasury Secretary Geithner and President Obama were adamant that it was Germany’s moral responsibility to capitulate and be the co-signer for the European Project and thus the global financial system. The onus was put on Frau Merkel to take the great leap forward and have Germany underwrite all the profligate programs of European nations.
Notes From Underground: JOBS, Another Disappointing Data Release
June 3, 2012Tonight’s BLOG POSTING WILL BE THE LAST FOR TWO WEEKS AS I HEAD OFF TO THE LAND OF THE RISING SUN. MY SUGGESTION IS TO GET LONG VOL AS MARKET ACTION ALWAYS INCREASES WHEN I TAKE AN EXTENDED LEAVE (just giving you the ultimate economic and trading indicator.)
Notes From Underground: Let’s Assume We Have A Can Opener…
April 15, 2012As regular readers of NOTES are well aware, I have been very critical of market participants like George Soros and their sanguine views of the European DEBT CRISIS. Many analysts like Jim Cramer have spent the last years waving the debt problem away. First, it was Greece was too small to have an impact on Europe. Ireland was too small and besides was ring-fenced by a bad bank structure. Portugal was smaller than Greece, thus nothing to be concerned about. Italy and Spain were possible problems but many were listening to the flirtations of the Chinese, who, time after time, made solicitations about purchasing European Debt. (By the way, we still haven’t seen the Chinese Sovereign Wealth Fund enter the fray.) If all else failed, European financial leaders were too exposed to the EURO to allow the European Monetary Structure to collapse. Germany would not allow the work of Helmut Kohl and others to be just another failed attempt at a unified Europe.
Notes From Underground: Europe Is Back to Center Stage … It’s the Crisis That Never Sleeps
April 11, 2012This week has again seen the resurrection of the European debt crisis as the world pays close attention to BOND prices in EURO BONDS. Yesterday saw the German Schatz fall to an all-time-low of 9 BASIS POINTS. Today as some calm was restored to the Spanish and Italian debt markets, the yield on the German 2-YEAR increased to 14 BASIS POINTS. Prompting the rally in the PERIPHERAL DEBT PRICES was a comment by ECB Executive Board Member Benoit Coeure.