First, on the geopolitical front the enforcement of sanctions on Russia is being met with disdain by some large European corporations. French energy giant Total is in talks with the largest privately held Russian energy company Lukoil to develop gas and oil fields using the latest drilling techniques. On Wednesday, Siemens CEO Joe Kaeser met directly with Russian President Putin and assured him that Siemens will not let temporal political problems upset the solid business relationship that the German conglomerate has developed with Russian technology and medical groups. The use of sanctions is problematic in a world defined by business interests. The German small and medium enterprises have vast business relations with Russia and it is estimated that 500,000 jobs are related to the export side of the equation. Russia sends energy and Germany responds with advanced, highly engineered products.
Posts Tagged ‘Nikkei’
Notes From Underground: Month-End, Quarter-End and Oh Yes, a New Fiscal Year in the U.S.
September 30, 2013Tonight’s agenda brings an announcement from Australia as the RBA meets to decide its forward monetary policy. Interest rates are currently at 2.5% on the overnight cash rate (OCR). Consensus is for no change and I would agree with that for the Aussie dollar has been stable and the 2/10 yield curve is a healthy 135 basis points positive slope. Confusion reigns around the world as politics is causing uncertainty in much of the developed world’s economies. Expect the RBA Governor to note risks to global growth and that the Aussie bank will remain vigilant. Also, with a new government elected in early September the bank will want to see what types of fiscal policy will be enacted before embarking on a change in current monetary policy.
Notes From Underground: A New Tapering That Is Needed
August 8, 2013Japanese Prime Minister ABE may need to taper, but this would be a fiscal tapering as he may want to take a Greenspanian approach to raising the sales tax and drip feed the increase into the economy. It MAY behoove the Japanese government to make the SALES TAX increase data dependent (sound familiar) and increase it 1% with every incremental improvement in the GDP. The NIKKEI index is struggling as it comes to terms with the projected increase due to take hold next year. Investors are nervous about the negative impact from the tax increase as they remember the last time that the Japanese authorities increased taxes to bring down the DEBT/GDP RATIO. The economy went into a deflationary downturn, even as the sovereign debt level was decreased for a short period of time. But ultimately as growth slowed tax revenue decreased and a negative feedback loop developed.
Notes From Underground: Bernanke Channels Eric Burdon, “I’m Just a Soul Whose Intentions Are Good, Please Don’t Let Me Be Misunderstood”
June 26, 2013As the markets attempt to recover from the Bernanke press conference and the threats of Chinese forcing an economic slowdown, the spinmeisters are out trying to “TAPER” Chairman Bernanke’s words. It seems that Jon Hilsenrath and others are saying that the markets have misinterpreted the chairman’s words. So, the pundits and talking heads are correct and the markets are wrong. It seems that many bloviators insist Bernanke was not saying when, just throwing it out there and testing the waters. Not one talking head has raised the idea that Chairman Bernanke was unnerved by the work of fellow academic and Fed Governor Jeremy Stein and remove some of the overheating in the credit markets. After all, the SPOOS have held reasonably well in the face of global political upheavals, rising interest rates and the looming fears of deflation.
Notes From Underground: Did The Chinese Fudge The PMI???
May 23, 2013First, Happy Memorial Day to all the readers of Notes From Underground. If you are a veteran of the U.S. Military, thank you for your service. If you aren’t a veteran, take the time to thank those who have served to fight for the freedom to write blogs and entertain the free interchange of ideas.
Notes From Underground: Will Parliament’s Dissolution Become the Beginning of the Solution?
November 14, 2012Last 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: The East Coast & Equity Markets are “Waitin’ On A Sunny Day”
October 30, 2012First and foremost: To all of my readers, friends and their families in the path of the hurricane that has wreaked havoc on so many lives, my thoughts and prayers are with you as you strive to put your lives back together. For you I am “Waitin’ On A Sunny Day.” The markets will do their job of assessing the damage to property and the economic impact that follows such devastation. Hopefully lost lives were kept to a minimum. For those trying to measure the economic impact I warn to be careful with all the flotsam and jetsam that will be filling the airwaves about how the repairs of the storm battered region is certain to be a form of economic stimulus.
Notes From Underground: The Markets Are Wrong (Or Draghi Lets Us Know Who Is In Charge)
October 25, 2012Following up last night’s post, Arthur left a note on the blog linking an article from Bloomberg Businessweek, written by Brendan Greeley. The language of the article is crystal clear and provides another example of a Euro policy maker claiming far more insight than the collective wisdom of Mr. Market. “Investors ,he told the Bundestag, are ‘charging interest rates to countries they perceived to be the most vulnerable that [go] beyond levels warranted by economic fundamentals and justified risk premia. This fear is “unfounded. The market is wrong.'”
Notes From Underground: At the End of Q1, Global Equity Markets Are Floating on a Sea of Liquidity
April 1, 2012The tale of the first quarter tape is in and evidenced by the large gains of the equity markets, global investors have benefited from the sea of liquidity provided by the CENTRAL BANKS OF THE DEVELOPED WORLD. Global stock markets have been calmed by the massive liquidity injections provided by the BOJ, ECB, FED and BOE.The German DAX closed the quarter up more than 15%. The long dormant NIKKEI was up almost 20% powered, by the new inflation mandate of the BOJ/MOF; and, of course, the S&Ps were up almost 12%, while the tech-ladened NASDAQ climbed more than 20%.
Notes From Underground: Japanese Policy … Is This An Evolutionary Change or a Mutation?
February 14, 2012Last 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.