So much of social science is dependent on various actors making rational decisions. Economics has regularly proven that “actors” certainly fail to act rationally as manias, crashes and panics in repeated form are proof (see Charles Kindleberger). In the realm of politics, the dependence on nation-states to behave rationally has led to many major policy errors. During the Cold War the balance of nuclear weapons prompted both super powers to remain reticent to embark on direct confrontations and avoid an unthinkable shooting war. The fear of world destruction also meant that the USSR and UNITED STATES would leash their “allies” to prevent any direct conflict between the two major hegemonists.
Posts Tagged ‘Merkel’
Notes From Underground: Is Macron a Moron?
September 12, 2017On September 7, I had the pleasure of chatting with Richard Bonugli of the Financial Repression Authority, covering topics previously discussed on Notes From Underground. The podcast allows for a much deeper analysis of topics covered here (and usually over a shorter span). Enjoy the conversation, and, as usual, please follow-up with questions so we can all benefit from the intelligence of Notes From Underground readers.
Notes From Underground: G-20 Photo Ops Become Relevant … For a Moment
July 10, 2017All of the words and photos emanating from Hamburg are figments of the media’s confirmation bias. In Monday’s Financial Times, Wolfgang Munchau had a splendid op-ed titled, “From Brexit to Fake Trade Deals–the Curse of Confirmation Bias.” Munchau calls out the Euro-Japan trade deal headlines for as he points out it was announced on the eve of the G-20 summit in order to embarrass President Trump. I laughed when I read the stories about the aforementioned trade agreement because while EUROCRATS presumed a signed agreement, the FACT is each EU state will have to approve the agreement. So the acrimony from the Euro/Canada trade agreement still reverberates.
Notes From Underground: Steve Bannon (Laugh, Laugh I Thought I’d Die)
December 6, 2016Even though Steve Bannon is no Beau Brummel, the music of this early rock song must be ringing in his ears. It seems clear to all but the dumbest media talking heads that the Bannon plan of Trump’s continued flow of tweeting is an attempt to make sure the Trump team controls the NARRATIVE. (See Ben Hunt’s magnificent piece at Epsilon about the significance of narrative.) This is important for investors and traders because of Trump’s ability to control the narrative makes us all focus away from the most events of the greatest possible consequence. Today, the airwaves were echoing the Trump tweet of the President-elect threatening to cancel the orders for two new Air Force One planes, the President’s personal fleet.
Notes From Underground: Oh, When Will They Ever Learn?
November 28, 2016This is a tough POST to write for I will criticize a newspaper I have read every day for at least 30 years. (In fact, I still have it delivered on my doorstep and read most of it online in the evening before the hard copy arrives.) The London Financial Times had a front page story, “Troubled Italian Banks Face Fresh Risk of Failing If Renzi Loses Vote.” This is a deplorable headline for it harkens back to the days of the mainstream media warning of dire consequences if Brexit passed and the Trump was elected president. THIS IS SCARE MONGERING. It raises the question: When will the Davos crowd EVER LEARN?
Notes From Underground: Together Again
October 13, 2016Back from the spiritual cleanse and I chatted with Mr. Santelli today about volatility as the prairie fires of global politics causes great angst and HEADWINDS for markets. There was nothing new for readers of Notes From Underground as we have weighed and measured many of the issues plaguing the global markets. In this post, I want to call attention to a couple of pieces that appeared in the press Monday night and Tuesday morning. The front page of Tuesday’s Financial Times had a story, “Deutsche Received Special Treatment In The EU Stress Tests Via ECB Concession.”
Click on the image to watch me and Rick discuss market volatility
Notes From Underground: For the Sake of Capitalism, Pepper Spray Davos
January 18, 2016Please, PEPPER SPRAY ALL THE ATTENDEES OF DAVOS in order to halt the rape of taxpayers and consumers across the globe. This annual conclave is responsible for more wealth destruction and the widening disparity in GINI coefficients than any public policy. I believe that the cost of attending Davos is priced at such an extravagant rate because it is a giant insider scam. Hobnob with politicians and policy makers in an effort to be part of the “smart money” crowd. It was the great moral philosopher and economist Adam Smith who so presciently noted: “People of the same trade seldom meet together, even for the merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The conspiracy against the public has been the financial repression of the global middle class in an effort to bail out those who are attached themselves to the public treasury to maintain the “animal spirits” of crony capitalism.
Notes From Underground: In Honor of French Independence, Europe Imprisons the Greeks
July 14, 2015And so it goes. As the light lifts off the European “bailout” it appears that most analysts agree that the “Agreement” was a lose-lose for the European Project. The Germans stood firm and placed unduly harsh demands upon the Greek electorate that had the temerity to openly reject the terms of debt resolution. Merkel had favored a real compromise until Alexis Tspiras deployed the nuclear option and went to referendum in an effort to better be able to negotiate with an intransigent Djisselbloehm and his ECOFIN council of Grand Inquisitors (see the Brothers Karamazov). The punishment meted out to the Greek nation is a loss for them but ultimately the real loss will be on Spain, Italy, and, of course France. The Germans have revealed that the use of Berlin’s money to support the EU is going to come at a price and it is the acceptance of an economic model for Europe that is German, its backdrop of course being sound money. Not the strong dollar mantra of the U.S. Treasury Secretary but an actual strong currency, at least until the German financial system enters a fragile state.
Notes From Underground: All the Rumors Fit to Print in an Algorithmic World
June 8, 2015Woke Up Got Out Of Bed, Dragged A Mouse Across My Desk … I read the News Today Oh Boy …
French Official:Obama Said Strong Dollar Is ProblemU.S. Official:Obama Didn’t Say Strong Dollar Was A ProblemWhite House Denies Obama Said Strong Dollar A Problem
These are the type of fabricated headlines that are meant to create volatility in a world in which algo headline readers react to key words: OBAMA, STRONG DOLLAR, PROBLEM. Did President Obama actually make a passing comment about the U.S. dollar? We don’t know except that the president himself denied making such comments at his G-7 press conference. It is poor journalism for media outlets to cite UNNAMED officials in distributing information that is certain to have market moving impact, but in today’s world of “first move” advantage there is a rush to get any headline to a Twitter feed regardless of validity. Did Obama make such a comment? Maybe in this context.
Notes From Underground: Is Mark Carney Subverting the Bank of England’s Credibility?
June 24, 2014It was 12 days ago the BOE’s Mark Carney delivered his Mansion Speech and warned markets that interest rates could rise faster than investors were forecasting, resulting in a strong rally in the British Pound against all currencies. The POUND was especially strong against its largest trading partner the European Union. Today, Governor Carney synchronized his thoughts with Fed Chair Yellen and announced that the BOE may be able to keep rates low for longer because the lack of rise in wages meant that there was still GREAT SLACK IN THE ECONOMY. (It appears that the central bankers have been cheating off each others’ papers.)