Posts Tagged ‘Germany’

Notes From Underground: Friday’s Wall Street Rally?

May 31, 2020

Friday’s Wall Street rally into the close of month end was the ultimate statement of the FED listens. Yes, only to the needs of the financial world as ULTRA CHEAP MONEY pushes equity prices ever higher in the search for yield beyond 50 basis points. The BONDS remain bid as short sellers live in fear of central bank intervention. When the 10- and 30-year yields begin to rise the FED speakers discuss the increased possibility of YIELD CURVE CONTROL, or YCC, making it difficult for any type of signaling mechanism to develop.

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Notes From Underground: Myopic Gibberish

May 12, 2020

The Tweeter-in-Chief on Tuesday was pushing on a string as he called for NEGATIVE INTEREST RATES (again). The Federal Reserve is also debating in public the idea of negative interest rates and seemed to believe there are better tools to be utilizing than rates below zero.

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Notes From Underground: The G-7 Meet on Tuesday

April 13, 2020

On Monday, Treasury Secretary Mnuchin said the G-7 will be holding a video conference Tuesday, which will include all the central bankers. What is on the agenda? It has not been announced so we are left to GUESSING. The Swap LINES have been opened, massive asset purchase programs are in place, new facilities have been created and fiscal stimulus is raining down in all the old familiar places. The OIL agreement is in place and the FED has even embarked on a program of exchanging CASH for high yield bond ETFs in an effort to prevent a continued negative feedback loop in corporate debt markets. What is there for the G-7 to discuss?

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Notes From Underground: What Does Friday’s Unemployment Mean, Mr. Natural?

April 2, 2020

IT DON’T MEAN SHIIIIITTTTT.

Let’s put aisde all the nonsense. But I will offer this: The average hourly earnings are going to begin to take on increased significance as the energy sector begins a massive shedding of HIGH PRICED jobs. Also, many other high priced employees are going to be losing work so the data is going to reflect a hit to consumers not only through the loss of jobs but from the destruction of HOURS WORKED by high income earners.

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Notes From Underground: And So It Goes

March 26, 2020

Everything we’ve discussed at NOTES FROM UNDERGROUND has come to fruition in a very real time. This is not predicting year-end levels or quarter-end levels but very critical calls in real time. My inbox has been inundated with pieces from analysts well after the fact. Last Thursday. I warned about the need to weaken the DOLLAR. Any reader long dollars is desirous of losing money.

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Notes From Underground:

February 11, 2020

In the 1960 classic film The Time Machine a traveler visits a future civilization in which a group of people is enslaved as a source of food. The food source are zombie-like and kept in comfortable captivity in an effort to control their protein source. After violence is done a siren sounds. When the time traveler questions the meaning of the siren the answer is it is ALL CLEAR but we never know what is all clear. Well, it seems the Coronavirus has been given the all clear signal based on the value of equity markets.

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Notes From Underground: Same Old Song With a Different Beat

December 1, 2019

There are few questions about the one-dimensional nature of the driving force of markets around the world. Cheap money sustains equity markets as the vast amounts of central bank liquidity continues to provide support for low-cost borrowing and a lack of alternatives for investors. A subset of the cheap cost of capital has been the “hoped” for resolution to the China/U.S. trade conflict which without question has disrupted global trade. South Korea’s recent economic performance is a reflection of the impact suffered by key components of the global supply chain driven export-oriented economy.

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Notes From Underground: I Am Not Your Beast of Burden

October 29, 2019

In the global financial system, the central banks are indeed the are system’s beasts of burden. With the November FED FUNDS contract pricing in 93% chance of a rate cut, Federal Reserve Chairman Jerome Powell will attach himself to the plow and till the soil, spreading more fertilizer for equity purchases and further financial repression of creditors. As we discussed Monday, the week is filled with central bank meetings of importance and further impacted by unemployment and GDP data. But there is so much more in the political realm that we haven’t even entertained:

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Notes From Underground: The Hills Are Alive With … Sounds?

October 20, 2019

There are so many sounds resonating in the global financial world it has been difficult to discern the impact of any particular tweet or headline. NOTES FROM UNDERGROUND hopes to cut through the babel to provide perspective, context and NUANCE. If we at NOTES cannot accomplish this then we’re just screaming into the chasm that is global macro finance. The impact of Chinese tariffs, Middle East maneuverings, QE programs — from the BOJ to the FEDERAL RESERVE (yes I know what the policy makers are saying — it’s not QE) to the ECB — need to be understood as they drive short-term moves but also have much longer consequences.

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Notes From Underground: For The Sin Of …

October 7, 2019

Let me wish all those celebrating the Jewish New Year a Healthy and Happy New Year (and I wish the same for those who don’t celebrate the Jewish calendar). Tuesday night begins the Day of Atonement in which the individual is obligated to acknowledge any shortcomings, ask GOD for forgiveness and announce the desire to rise to a higher level in the coming year. There is a list of 44 sins confessed publicly, which covers the entire litany of transgressions the individual/community has most probably engaged in. (I’ve linked a list here.)

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