Posts Tagged ‘PBOC’

Notes From Underground: Christine Lagarde Is Quietly Raising Her Voice

October 14, 2012

The IMF took center stage during the last four days as its meeting in Tokyo became the central focus of the global macro world. As usual, the IMF communique promised much via the usual platitudes but as investors and traders we are left in the lurch as much is promised but no real substance is revealed. Probably the most important element in the communique is the line, “WE NEED TO ACT DECISIVELY TO BREAK NEGATIVE FEEDBACK LOOPS AND RESTORE THE GLOBAL ECONOMY TO A PATH OF STRONG,SUSTAINABLE AND BALANCED GROWTH.” Why is this simple statement so critical? In last week’s IMF-produced “World Economic Outlook,” it revealed that the IMF‘s model is probably flawed when measuring the impact of fiscal policy on economic growth.

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Notes From Underground: Central Bank Poker–After the AUSSIES CHECKED, the BOE BET; the ECB CALLED

July 5, 2012
No great surprises from the mandarins of global finance. First, the BOE announced the widely anticipated 50 BILLION QUID increase in the QE program but Mervyn King and company did not cut the overnight lending rate. Following on the heels of the BOE, the ECB, under the guidance of Mario Draghi, cut the overnight rate by 25 basis points to 0.75% and also lowered the ECB deposit rate to zero from 0.25%. Again, no surprises, although the DEPOSIT RATE CUT WAS NOT WIDELY EXPECTED. Why did Draghi move to make the deposit rate ZERO?
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Notes From Underground: Laugh, Laugh, I Thought I’d Die

February 19, 2012

Two big issues have been the rage of financial news during the weekend. First, the Chinese Central Bank lowered its reserve requirements by 50 BASIS POINTS in what is being termed an effort to engineer a “soft landing” and prevent a drastic fall in GDP. This is my first laugh as the raises in the reserves during the last 18 months did little to slow the economy. Besides, if the Chinese Politburo wants to install pro growth policies it has control of the credit creating mechanism. As the markets are looking for anything that sustains the recent global equity rally, why not the Chinese reserve ratio?

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Notes From Underground: What Do Greece and the Federal Reserve Have in Common?

February 15, 2012

As rumors about Greece run rampant, it is apparent that Greek FINANCE MINISTER VENIZELOS has stepped to the fore to try to influence his hand as the leader of Greece. THE COURT-APPOINTED LUCAS PAPADEMOS HAS BEEN QUIET OF LATE AND IT IS VENIZELOS LASHING OUT AT GREECE’S EUROPEAN “BENEFACTORS.” The fact is that there are so many microphones in EUROPE in search of an expert that all the media reports prove to be worthless. Timelines of action are void as soon as they are presented yet the markets continue to be affected by random noise.

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Notes From Underground: The Chines raise interest rates and the GOLD makes all-time highs climbing a GREAT WALL OF WORRY

April 5, 2011

The FED released the minutes of the last FOMC meeting and there was very little that hadn’t already been revealed and digested by the market. In tonight’s reading, some in the media are trying to raise an issue that there is a rift between voting members. Readers of the NOTES will know the answer: There is no rift. Yes, between meetings there is a plethora of dissenting speeches but as the FOMC MINUTES are clear to record, the vote to stay the present course was unanimous. The thing that seems the most transitory to the FED is the lack of dissension when gathered at the same table. To paraphrase PUDD’NHEAD WILSON, WHEN ALL THE EGGHEADS ARE IN ONE ROOM, WATCH THE ROOM CLOSELY.

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