Posts Tagged ‘Hu Jintao’

Notes From Underground: It’s Raining Liquidity All Over the World

September 9, 2012

Friday’s unemployment report solidified the TRIFECTA of LIQUIDITY for the week. ECB President Draghi seeded the “liquidity clouds” at Thursday’s press conference by announcing the installation of the OTM (outright monetary transaction), which will allow the ECB/ESM to purchase unlimited amounts of sovereign debt of up to three-year duration–of course with conditions for those asking for help. Draghi is hoping to buy the whole EU project enough time so that a FISCAL UNION CAN BE FORMED WITH THE ABILITY FOR THE EU TO ISSUE A TRUE EUROBOND.


Notes From Underground: Draghi Takes Center Stage; Will Mervyn King Pump Up The Volume?

February 8, 2012

Tomorrow the BOE and ECB will release their interest rate intentions. The Bank of England is expected to keep the funding rate at 0.50% while moving to increase the ASSET PURCHASING FACILITY (QE BY ANY OTHER NAME) by another 50 BILLION POUNDS to a level of 325 BILLION STERLING. The recent speeches from the Monetary Policy Committee have had a DOVISH bias, prompting the consensus view for an increase in the QE program.


Notes From Underground: Inflation sets on the BRITISH empire

February 15, 2011

The inflation data released by the U.K. showed that CPI has increased to 4 percent. The largest price increase was in INK costs as Mervyn King had to pen another letter to the Chancellor of the Exchequer explaining the price increases maintained during the BOE’s inflation-mandated levels. King has placed himself in a difficult position as he has held rates steady in the face of rising inflation. Governor King’s stance is the same as Bernanke’s. The rise in prices are due to elements that the CENTRAL BANK cannot effect and the inflationary impact is acting as a drag on the consumer. Why ?


Notes From Underground: U.S. heaps crap on the Chinese and fertilizer stocks drop

January 19, 2011

As everybody tuned into some form of media knows, Hu Jintao, the President of China, is in Washington for high-level meetings with President Obama. After all the pageantry and display of hospitality, the U.S. President took the effort to admonish the Chinese leader on human rights within China, or rather, the lack of human rights. Mr.Obama also lectured the Chinese leadership on the importance of a world power acting responsibly on the world stage, hence the need for China to be a partner in opposing Iran’s development of nuclear weapons and, of course, in leashing the North Koreans.


Notes From Underground: BOE, check; ECB, check; Bank of Korea Raises

January 13, 2011

As expected, the U.K. and the Trichet-led ECB held rate steady. The surprise was the South Korean Bank raising rates 25 basis points to 2.75 percent. Yet the markets, although purportedly surprised, did very little with the WON. More interesting for the currency markets was Trichet’s statement that the ECB was concerned about inflationary pressures within the EU. This on a day when Greek unemployment rose to more than 13 percent. Mr.Trichet, will you ever learn? The markets have just allowed the EU to phony up the Spanish and Portuguese DEBT auctions and before the DOLLAR can even try to rally, Trichet plays the INFLATION card. Really, with an overall European unemployment rate of 10 percent, do the ECB policy makers not believe in output gaps, and, of course, NAIRU?


Notes From Underground: Chinese inflation is the overblown news story

December 12, 2010

The markets were waiting to see the Chinese inflation numbers and a possible interest rate increase from the CENTRAL BANK. The Chinese price increases were higher than expected and some analysts believed that the rise in food prices was the culprit for the inflation increase. Hu Jintao, China’s president, assured the Politburo that inflation would be dealt with and they would “battle inflation without jeopardizing growth.” Friday, before the release of the inflation data, China raised its reserve requirement by another 50 basis points. Reserve requirements have not yet had much success in slowing Chinese growth in the past. If food prices are REALLY the major variable causing prices to rise, wouldn’t an appreciating YUAN with increased food imports do a great deal to stem food price inflation?


Notes From Underground: Bernanke sings with Huey Lewis–Your Cash Ain’t Nothing But Trash

November 4, 2010

In day one of the world held hostage, the FED‘s QE2 program proved a great success. The dollar declined. Commodities soared. Metals shined. The equity markets took its newfound wealth effect in full stride. And the Treasury market rallied. Even though the 30-year bond is not a major component of the FED‘s purchasing program, it too rallied strongly as the sub 2.5 percent yield on the 10-year note sent investors further down the curve looking for a little more yield. The FED got all the bang out of the “wealth effect” that it could as investors around the world have realized that their  “cash was nothing but trash”–exactly the outcome the FED is looking to achieve.