Posts Tagged ‘QE’

Notes From Underground: Traversing the Global Macro Landscape With Danielle DiMartino Booth

March 23, 2022

On Tuesday, I sat down with Richard Bonugli and Danielle DiMartino Booth. We traversed Ukraine, Europe, the U.S. and Danielle delved deep into the her expertise of the Federal Reserve. We discussed the recent work of Zoltan Pozsar as it has had such a great impact on the current state of global financial markets. This sets the table for Richard’s next FRA Roundtable, which will feature Mr. Pozsar, who is one of the more knowledgeable financial “plumbers.” Pour your favorite WHISKEY as the financial system is explored for potential profits involving commodities, currencies, yield curves and tangentially precious metals.

Click here to listen to the podcast.

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Notes From Underground: The Soft Bias of Low Expectations

February 3, 2022

Tomorrow is the first Friday of the month so it is known on trading desks as UNEMPLOYMENT Friday — or Unenjoyment Day for some — as volatility will reign in the early part of the trading day. As we have discussed ad nauseum volatility is the predominant theme as all the world’s central banks discuss the removal of QE, as well as raising the cost of money through returning nominal rates from a steep NEGATIVE REAL YIELD to some normal zero or hopefully a POSITIVE REAL YIELD. But headline inflation reveals that all central banks have a great task ahead in an effort to reach what POWELL and others refer to as normalcy.

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Notes From Underground: Coal for Some Stockings?

December 12, 2021

If you’re only looking at the headlines from the past 48 hours, there is something major going on. First, on Friday afternoon Bloomberg reported that the G-7 finance chiefs are planning to discuss inflation as prices soar and the Financial Times followed on Saturday about the U.S. Democrats pushing the Federal Reserve for tougher action against inflation. These two stories are everything that we at NOTES FROM UNDERGROUND have been discussing since the Dems’ poor election showing last month.

The White House polls — and thus the political operatives — reflected that inflation concerns were going to be the biggest issue for all Democrats in 2022, which is why there was a sense of urgency to use SPR and release oil to drive headline energy costs down. It’s the classic political ploy to appear to be doing something. What’s next? Wage and price controls?

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Notes From Underground: Will It Be An Inflated Jobs Report?

September 2, 2021

After FEDERAL RESERVE Chairman Jerome Powell’s Jackson Hole speech, the jobs data may have taken on added significance. Inflation was not a concern for Powell as that is considered transitory within the bowels of the FOMC. The failure of the employment situation to enable all who lost jobs due to COVID “through no fault of their own” has regained paramount importance.

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Notes From Underground: Powell’s Pathetic Political Posturing

August 29, 2021

First of all, my offer of any part of a $10,000 bet with 10-1 odds against Jerome Powell being renominated as FED CHAIR is OFFICIALLY RESCINDED. The Fed Chair’s speech was so pathetic that it can only be explained by his desire to be renamed central bank head. Powell’s speech would be called DOVISH on any given week but there were six FED presidents speaking out in favor of moving up the schedule for tapering QE to counterpunch. It was not only the increased hawkish stances of previous UBER DOVES, which provided cover for Powell but the highly esteemed Mohammed El-Erian and Larry Summers also called for the FED Chair to be bold at Jackson Hole.

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Notes From Underground: For What It’s Worth

August 24, 2021

There is a wonderful song from the tumultuous 1960s by the band Buffalo Springfield that is so apropos for the financial markets over the last two weeks (staying away from Kabul). The lyrics for the first two verses describe the situation for investors as we approach the tectonic plates of monetary policy that have provided the Kansas City Fed Symposium at Jackson Hole with its heightened significance. Several keynote speeches revealing policy changes have been delivered to this August group.

“There’s something happening here ,But what it is ain’t exactly clear
there’s a man with a printing press over there, telling me I got to beware
“There’s battle lines being drawn,nobody’s right if everybody’s wrong
Young people speaking there minds,Getting so much resistance from behind”

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Notes From Underground: Trade Complications (The Power of the Nation-State)

July 25, 2021

That headline is courtesy of Whitewave Trading, an interactive chat room in which high-powered analysis for traders generates some great trades and uses NOTES FROM UNDERGROUND to add a fundamental view. Monday’s Whitwave has this advice: “When and if they ever taper, I’ll turn over the trading card.”

For those never on the trading floor this is in reference to going from the BLUE buy side to the RED sell side. In a follow up to last week’s blog post this makes perfect sense for as it seems that a critical indicator to an equity correction in the U.S. would begin with the FED actually moving to a real TAPERING or in Peter Boockvar’s words, A QUANTITATIVE TIGHTENING.

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Notes From Underground: How To Deal With Transitory Data

March 18, 2021

First, thank you to allĀ  who filled in for me as I spent nine full days packing up my life in Chicago. Raising four children and being the repository for many of my loved ones “stuff” resulted in a drowning in memories as well as material possessions that raised questions about what the HELL was that for and why? Our last post was March 1 but I am proud to point out that there were about 74 comments on that entry, all but mine being extremely valuable. Thank you to all for the way you raised the bar for discourse even higher.

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Notes From Underground: Was It the Fool On the Hill?

February 23, 2021

On Tuesday, Federal Reserve Chairman Jerome Powell testified before the Senate Finance Committee in the semi-annual Humphrey-Hawkins Testimony and Report to Congress, in which the Fed has to answer as to how the U.S. economy is performing in relation to its dual mandate. Senator Sherrod Brown, the chair of the finance committee, is very knowledgeable and in similar fashion provided strong leadership but unfortunately he cannot censor stupid questions as politicians use the microphone for political posturing. There were many types of “when did you stop beating your wife” questions as if the Senators wished to trap Powell instead of an honest assessment.

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Notes From Underground: May Day or Mayday Mayday Mayday?

May 3, 2020

On Friday the world “celebrated” May Day, when the red flags of the world’s workers united in solidarity are traditionally unfurled. The fall of the Berlin Wall unleashed the rush for economic development and a plethora of workers in search of capital to lift its productivity. And for the past 30 years have capital and wages have been elevated for the emerging economies yet stagnant for the developed region. It has been capital that has been the recipient of increased profits as global capital went to the lowest wage regions.

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