It wouldn’t be Notes From Underground if we didn’t ask the most obvious and ridiculous question. It may be the subject of global comedians but the NSA‘s overreach is not a laughing matter for what it really shows is that in the guise of National Security, even a democratic republic leans toward political repression. This is similar to the McCarthyism that grew from what Michael Parenti called “the Anti-Communist Impulse.” Everything becomes an excuse for the government to pry and the danger for all lovers of freedom is that once governments delve into every nook and cranny of life, the end result is always disastrous. It is not about Democrat or Republican for the Democrats will not always be in office.
Posts Tagged ‘Jeremy Stein’
Notes From Underground: What’s Bernanke Afraid Of? (CNBC)
June 23, 2013
Click on the image to watch Yra discuss what Bernanke fears.
Notes From Underground: Tapering Is Tightening? So Spoke The Market
June 19, 2013Today was the most anticipated FED news conference since TRANSPARENCY became the buzz word of the post-Greenspan era. The FED Chairman took center stage (he was deputized) to bring clarity to the issue of ending the FED‘s large-scale asset purchase program. Mr. Bernanke made sure that the financial world understood that tapering was not tightening. Well, the market may have heard but it did not listen. The Chairman’s words gave impetus to a selloff of EQUITIES, BONDS and precious metals. Overall, the rise in interest rates evidently led to a deleveraging of a mass of positions dependent upon massive leveraged positions, especially in EMERGING MARKET CURRENCIES. The Brazilian real made four-year lows and the Mexican peso was also under severe pressure as higher U.S. interest rates are expected to force a repatriation of funds back to the safe waters of the U.S.
Notes From Underground: Volcker Finds His Voice
June 4, 2013Ex-FED Chairman Paul Volcker delivered a speech on May 29, which served as a “shofar” blast, warning the FED and its governors to be cautious in possibly undermining the credibility that all central bankers strive to maintain. Mr. Volcker does not doubt the intelligence of Chairman Bernanke but what he worries about “… is a matter of good judgment, leadership and institutional backbone” (READ THAT AGAIN). “A willingness to act with conviction in the face of predictable political opposition and substantive debate is, as always a requisite part of a central bank’s DNA.” Now, knee-jerk FED supporters (insert name here) will maintain that is what Bernanke did in presenting QE1, QE2 and QE3–but he certainly had the support of a democrat-controlled HOUSE and SENATE in 2010. Also, the White House was a fervent supporter of massive monetary stimulus as he helped keep the economy from sliding into a chaotic state of asset liquidation. The FED may have suffered the barbs of some “tea party” legislators but for the most part the major powers in Washington and Wall Street provided the needed support for the FED.
Notes From Underground: There Must Be Some way Out Of Here, Said The Joker to the Thief (Bob Dylan)
March 19, 2013Yes, another day and the markets had to try to understand the significance of Cyprus. The newswires were filled with analysts claiming this was a “tempest in a teapot” and that the doomsayers were blowing the Cypriot problem into a pseudo crisis. Again, a world that is highly leveraged is subject to a “single spark starting a prairie fire” and the fear of contagion and an electronic bank run are very real if the major policy makers don’t invoke the trust of the electorate and investors. The perceived actions by IMF Director Lagarde (the joker) and the liquidationist mentality being thrust from Berlin and Chancellor Merkel (the thief) have created a situation where European bank depositors are nervous, especially so in the peripheral banks. THE MAIN COMPONENT OF THIS UNCERTAINTY WAS THE MOVE IN THE FRONT MONTH EURIBOR CONTRACTS,AS THE JUNE 2013 FELL 10 TICKS ON A DAY WHEN OTHER INTEREST RATES WERE LOWER. NOTHING SAYS BANK FEARS THEN A COUNTER MOVE IN THE EURIBOR AND LIBOR MARKETS. An increase in bank yields with equity markets falling is a sign about the fear in the bank deposits market. It seems that the policy makers that are leading the previously “revered” TROIKA (IMF,European Commission and ECB) have initiated fear for a mere pittance.
Notes From Underground: The FOMC Minutes … Worried About Premature Extraculation
February 20, 2013In reading through the FOMC minutes I ponder the headlines that screamed about the hawkish tone in the minds of the FOMC members. You have to be looking for “negative waves” to find an overly cautious FED. The most striking effort of ending the LSAP (large-scale asset purchase) program is the work of Governor Jeremy Stein who delivered a powerful speech last week about the mal-effects that the FED‘s QE program was having on other financial markets (especially the corporate debt markets where the search for yield was causing the possible removal of risk pricing into the high yield corporate bonds.) The minutes noted: “Several participants discussed the possible complications that additional purchases could cause for the eventual withdrawal of policy accommodation, a few mentioned the prospect of inflationary risks, and some noted that further asset purchases could foster market behavior that could undermine financial stability.” Again, no surprise here as it was detailed out in Jeremy Stein’s speech.
Notes From Underground: Pay No Attention … To the Stock Market Behind the Curtain
February 10, 2013There are ideas permeating the financial media that need to be challenged. There is a continuing idea that the present value of the U.S. stock market is stretched based on historical valuations. I will continue to question this assessment FOR HOW DOES AN INVESTOR VALUE FUTURE EARNINGS IN A ZERO INTEREST RATE ENVIRONMENT? Further more, corporate earnings need to be evaluated with consideration for record low borrowing costs and stagnant wages. This week I hope to take a look at the historical percentages of payroll and interest expense and to see where the present numbers fall in relative terms. The markets may well be overvalued on some normal assessment but we are not operating in any sense of “normalcy.” This present financial atmosphere renders so much historical analysis worthless, which is why this year portends to be so volatile.
Notes From Underground: OBAMA GIVES THE FINGER TO MAIN STREET AND OWS
December 27, 2011The news during the last five days has been sparse as the regular year-end news items filter through the talking heads giving prediction after prediction about what will occur next year. Everything from the break-up of the EU to the closing of the Straits of Hormuz winds its way through the markets. The only significant story is the parking of LARGE AMOUNTS OF EUROS AT THE ECB as the distressed banks of Europe seem to want to place excess reserves with the Draghi Bank rather than buy the sovereign debt of Italy, Spain and the others.