Posts Tagged ‘Korea’

Notes From Underground: Amazing Grace has appeared and it’s in Jackson Hole

August 24, 2010

Amazing Grace! How sweet the sound,
That saved a wretch like me.
I once was lost but now am found,
Was blind, but now I see.

The markets are reacting to a Wall Street Journal article by the new FED fair-haired minion, Jon Hilsenrath, and the great dissonance that took place at the last FOMC meeting. Our readers know that we have been very critical of the FED and its reliance on models that, on a good day, are so badly flawed. The pursuit of economic policies based on poor analysis has been a major problem and the markets are waking up to the fact that the FED is neither omniscent nor omnipotent. Today, the markets are responding to the fear that the FED is” lost in the ozone ” so risk is being taken off and the algorithm’s of the risk-off trade are in full motion.

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Notes From Underground: G20 Dead as Geithner comes up short in effort to criticize the German austerity measures and the ban on shorting and naked CDSs

May 27, 2010

Oh well, another day¬† of market volatility emanating from the four corners of the globe. The Korean Peninsula sits on edge, the Chinese say that they are still investing in Europe, the U.S. Congress is still in the throes of financial regulation, and Treasury Secretary Geithner stops in Europe to add to confusion to a muddled mess. The Chinese denial of the SAFE rumor led to a sharp equity rally and in general a market profile of risk on: the dollar sells off as money searches for return rather than safety. The financial world is truly the soap opera “As the World Turns.” Volatility is here to stay and the most important task is to find the dynamic that is in play at any one time. Is it LIBOR, commodities, easy money? Which ultimately drives the risk-on/risk-off drama?

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