The tinder of the financial world has dried under the roaring blaze of asset appreciation. Global bond and equity prices reflect that all is well and the world’s major central banks have control of the world’s finances. But in the parlance of Mao, a single unexpected spark can initiate a huge fire. (Also, it is important to note that Mao never missed a PMI number either.) Financial history is replete with events of which investors and bankers were never aware of the depth. It was only in 2007 that Chairman Bernanke called the housing situation and its financial repercussions, “well contained.” Today, the news brought two events that can have far greater impacts than the markets’ calmness revealed.
Posts Tagged ‘PMI’
Notes From Underground: TOTO Is Out of Kansas and Back In Washington
December 16, 2013Will TOTO bite the wizard behind the curtain? Toto, in this case, is not Dorothy’s dog but rather the market’s obsession with taper on/taper off, or TOTO. Today’s trading proved to be a “ball of confusion” as the market emerged from a relatively quiet weekend to open in a taper off mode as the bonds and equities were bid. The currency markets were relatively quiet as were the precious metals. Mid-morning, though, the long end of the Treasury curve began to sell off and the yield curve went from a flattening bias to steepening, which seemed to represent the market adopting a taper on bias. However, the currency and precious metals markets reacted contra to previous correlations and rallied as the yields on the long-end of the curve rose. (Again, very confusing in regards to recent patterns.) The BONDS closed toward the lows but the metals and equities held their rallies, which leads me to believe that the market has adapted to the idea of a Fed tapering being tied to a change in the language of forward guidance.
Notes From Underground: The Santelli Exchange (CNBC) — China Data: Questionable Accuracy?
November 1, 2012
Click on the image to watch Rick and I discuss the accuracy of China’s data.
Notes From Underground: Unemployment in the U.S.–Does Slowing Jobs Provide the FED With a Pause That Refreshes?
June 5, 2011The U.S. jobs report provided great support to the bears on Wall Street as the 54,000 nonfarm payroll number led to a sell off in the DOLLAR and another drop in the Dow, S&Ps and all other equity indexes. For all the equity down/dollar up analysts, last week was a breakdown of that temporary correlation. U.S. equities were down more than 2% for the week while the EURO was up 2.5%. It seems that the global financial community is becoming more concerned about a softening U.S. economy and what it will mean for the budget discussions and FED policy.
Notes From Underground: IF ALL THE DATA WAS POSITIVE, WHY WAS THE DOLLAR THE ODD MAN OUT?
February 1, 2011Last night the RBA, as expected, left rates unchanged at 4.75 percent. The statement released after the meeting was deemed semi–HAWKISH as the RBA noted the strength of India and China. The Australian central bank also opined that the massive Australian floods would result in pressure on wages as the rebuilding and repairing would bid away construction workers from the extremely buoyant mining sector. Some analysts had been bearish the AUSSIE DOLLAR based on lost productivity but GOVERNOR STEVENS ended that outlook.
Notes From Underground: The markets will labor with the unemployment report
January 6, 2011Let me state out again as to why the FOREX markets are going to be a difficult investment in 2011. The emerging markets and commodity-based currencies have been the repositories of global capital seeking to take advantage of the Chinese and India growth phenomena without having to actually invest in the countries themselves. If you like China, buy the Australian equity or currency as it provides a proxy on Beijing’s growth policies: A classic case of providing picks and shovels rather than mining yourself.
Notes From Underground: This week’s main events-elections, FOMC, unemployment
November 1, 2010The slew of U.S. data has been a mixed result. The personal spending and earnings number were both soft, while the PMI manufacturing number was better than anticipated. Equity markets shrugged off the weaker data as the market closed higher, although far off the early highs in the S&Ps and even traded lower late in the day.
Notes From Underground: WEN in Rome
October 7, 2010Chinese Premier WEN Jiabao visited Italy after the EU/China summit that took place this week. Wen had been to Greece earlier as China is looking for assets in the battered peripheral economies of the EU. Are the Chinese sovereign wealth funds truly interested in European troubled assets or merely attempting to buy some good will so as to break up a possible unified action by the developed nations against the renminbi? The Chinese are in Italy and making some noise about buying Italian companies to ensure a place in the European economies.
Notes From Underground: the IMF gathers in Washington D.C.–guns or knives
October 6, 2010Let’s get the IMF and G-7 noise out of the way. As usual, we will hear and read about all the brotherly love that will be shared at the IMF gathering but in the present situation we will be having none of it. The acrimony in the international arena on all economic issues isn’t going to be assuaged over cocktails and photo ops. Last year we heard about all the agreements that had been reached on global financial regulations and of course the prevention of currency manipulation and intervention. In a year all of that has been relegated to trash heap. The emerging world has been asking for free trade and have been rebuffed. China will bear the brunt of the major currency manipulator but many others are seeking to join the Chinese.