Posts Tagged ‘MOF’

Notes From Underground: Moody’s Hits France With A Yellow Card

November 19, 2012

Well, Moody’s downgraded the France’ sovereign rating from AAA in what was an obvious bow to reality. MOODY’s, WHAT TOOK YOU SO LONG? This will really be a bitter pill for President Hollande as it was only last week that the “French cock” was crowing about how well the bond markets were evaluating his performance as the leader of France. I reminded readers that the recent performance of the French debt had more to do with Mr. Draghi’s aggressive actions than any policy put forward by the Hollande government.


Notes From Underground: Will Parliament’s Dissolution Become the Beginning of the Solution?

November 14, 2012

Last night , Prime Minister Noda decided to call for new elections in Japan and that automatically ends this session of the DIET. The elections will take place in a month and the present unpopularity of the DPJ means that the LDP is the favorite. It seems that Noda was willing to call elections on the promise that the new parliament would work toward some type of election reform. Hopefully some of the readers of NFU will help fill in the specifics about the issues of election reform. The YEN was sold off on the news of Parliament’s dissolution because the present strength of the YEN and its negative impact on Japanese manufacturing is certain to be an issue. The LDP’s leader, Shinzo Abe, has been very vocal about the BOJ/MOF doing more to raise inflation in the Japanese economy and to be more aggressive in efforts to weaken the YEN. While the YEN weakened, the NIKKEI index held its overnight gains even as the S&Ps, DOW and NASDAQ were knocked lower following President Obama’s press conference.


Notes From Underground: Japan’s BOJ … Seize the Day

October 28, 2012

Monday night the BOJ will announce its newest and latest effort to stimulate the economy and most importantly try to undertake some genuine measures to weaken the YEN. The Japanese economy is suffering under the weight of an overvalued YEN. The YEN was only a minor problem when the global economy was experiencing strong growth but with the BRICs slowing and EUROPE on the cusp of a major recession, the Japanese policy makers have to confront the YEN head on–time is not on their side. The time for the BOJ and Ministry of Finance is now for the market is wanting to be SHORT YEN so if the Japanese policy makers can seize the day and invoke some type of foreign bond buying scheme the currency markets will do the heavy lifting for the BOJ/MOF.


Notes From Underground: Unemployment In the U.S. Was Much Ado About Nothing

August 5, 2012

The better-than-expected NFP number–163,000 net job gains–was above the consensus of 105,000. Average hourly earnings and hours worked were weaker than projections while the over all rate went up to 8.3%, leaving all the talking heads with something to either like or dislike. In my mind it is highly doubtful that the unemployment data was responsible for the 2% increase in the S&Ps, which brings back the Spanish and Italian 2-YEAR NOTES as the key variable.


Notes From Underground: Why Is It That Angela Merkel IS the DESIGNATED DRIVER FOR WORLD FINANCE??

June 26, 2012
The G-20 meeting in Mexico resulted in Chancellor Merkel being the PINATA for the other 19 guests as they beat her with the stick of moral certainty. U.S. Treasury Secretary Geithner and President Obama were adamant that it was Germany’s moral responsibility to capitulate and be the co-signer for the European Project and thus the global financial system. The onus was put on Frau Merkel to take the great leap forward and have Germany underwrite all the profligate programs of European nations.

Notes From Underground: Japanese Policy … Is This An Evolutionary Change or a Mutation?

February 14, 2012

Last night the BOJ announced its monetary policy and revealed inflation targeting and an increase in its variation on the theme of QUANTITATIVE EASE (QE). The INITIAL reaction has been that the YEN was heavily sold against the DOLLAR and other currencies. Is this action by the BOJ and supported by the MOF (Ministry of Finance) going to succeed in weakening the YEN? October 31, 2011, the BOJ intervened in the currency markets by BUYING DOLLARS AND SELLING YEN and on that day took the YEN FROM 0.7560 to 0.7960.


Notes From Underground: Let The Markets Reveal Their Resolutions

January 2, 2012

The “MARKET” will resolve to test the GRIT of traders and investors as the mysteries of politics and economics collide to make the daily lives of traders difficult, to say the least. In 2011, the markets left traders and various investors sleeping like babies as we were relegated to getting up every hour to cry. We must remember that the market’s “JOB” is to  cause as much heartache and pain to as many people as possible as money seeks to attain a positive return Last year the market was in its full glory as it caused some of the world’s foremost global macro investors to be humbled in a capacity not seen since the credit market debacle of 1994-95. This year seems to be of a similar ilk as the travails of the EUROPEAN UNION will continue to weigh upon the flows of global capital.


Notes From Underground: Friday and the BINI SMAGHI Rally Continued

November 13, 2011

It was a risk-on day Friday as the markets were ostensibly relieved by the exit of Berlusconi in Italy and Papandreou in Greece. The replacement of two European will have little effect on the austerity proposals facing the beleaguered profligate states. Most important for the EU is whether the EUROS will be “FOUND” to backstop the indebted sovereigns so as to be able to aid European banks loaded with “risk-free” sovereign bonds. There are meetings all over the world to find support for a world-wide bailout of Europe as the G-20 meeting revealed the urgency of the situation.


Notes From Underground: The Inflation Fears are Muted as a Renewed Threat of Deflation Appears on the Horizon

June 12, 2011

Global equity markets have been under pressure as the economic data from all regions of the world has been weaker than expected. British industrial production numbers were horrid and other areas in Europe have also experienced worse than anticipated activity. Low-money rates have been successful in pumping up many asset classes, especially since Jackson Hole Speech of August 27, 2010. The developed world’s CENTRAL BANKS have been creative in finding ways to keep REAL INTEREST low if not outright negative, making investors holding of cash a losing endeavor.


Notes From Underground: A Very Slow news Weekend Unless You Are in the Middle East

April 24, 2011

The markets have been given a modicum of quiet as all ears turn  to this week’s FOMC meeting. It seems that the FOMC release will be at 11:30 a.m. CST, which is an hour and forty-five minutes earlier than usual and the Bernanke meeting with the press will begin at 1:15 p.m. CST. A great deal of importance is being place on this historic first press conference. Much is also being made about the end of QE2 but I am not one of those looking for wild action when the FED stops buying Treasury debt. It seems that the FED may not announce “new” purchases but it doesn’t mean that they won’t be rolling over expiring issues and purchasing other debt in the market with the rolled over money.