Posts Tagged ‘Germany’

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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Notes From Underground: Rhapsody On the European Union

September 23, 2019

On Thursday Peter Boockvar and I gabbed on all things macro with Richard Bonugli. We covered a great deal of the global financial quilt and as we remind listeners, we have done this to clarify important issues regarding financial concerns in an effort to either reduce risk or enhance  profits.Concerns are still relevant in regards to what actually happened in Saudi Arabia as well as central bank credibility.

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Notes From Underground: Dudley Do Right Gives the Markets Snidely Whiplash

August 29, 2019

Ok, I couldn’t resist the obvious joke. It seems that former New York Fed President Bill Dudley penned an op-ed for Bloomberg in which he elevated the Fed into an actor in the U.S. political process. The message that Dudley initially tried to convey is one that NOTES has actually expressed concerns: That President Trump has trapped Chair Powell by using TARIFFS as a mechanism to bludgeon the FOMC into lowering rates to counter any of the negative impact from trade frictions unleashed on the global economy. Dudley admonished Powell to play the role of Bartleby the Scrivner in Melville’s short story, that when it comes to cutting rates in response to financial implications of the China/U.S. trade war, simply say “I choose not to.”

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Notes From Underground: ECB, Political Pawn?

July 4, 2019

Warning: There’s a great deal of colorful language in this very important discussion regarding the nomination of Christine Lagarde to the post of European Central Bank president. This is another political move by the EU elite to avoid placing a German at the helm of the ECB. Jens Weidmann may be a tough choice but Lagarde is preposterous, as Jean Claude Trichet might say. If you thought Mario Draghi was a politician and a dove by design, Lagarde will make Draghi look like a HAWK. In my opinion, IMF Director Lagarde has been and remains the ultimate politician. The role she played in the Greek bailout was pure politics and the price paid by the Greek citizenry has been steep. All in an effort to bailout many European financial institutions. Ask Yanis Varafoukis what he thinks of the Lagarde nomination.

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Notes From Underground: Trump Has Weaponized The Dollar. Do the Longs Know?

June 12, 2019

Some shots were fired last Friday, but it seems that the markets can only hear the siren song of White House tweets. There was an important story from Bloomberg reporter Saleha Mohsin titled, “Trump’s Currency War Plan Puts Treasury and Commerce at Odds.” The article noted that “a Commerce Department proposal to impose countervailing tariffs on countries that it determines have devalued their currencies has alarmed officials at the Treasury Department.”

It appears that President Trump has grown frustrated by Treasury’s failure to name any country as a “currency manipulator.” It has been Treasury’s bailiwick to monitor the foreign exchange interventions of countries who strive to artificially hold down the value of their currencies in an effort gain a competitive advantage versus any G20 country, especially the U.S. (from the Treasury Department perspective).

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