As everybody reading and/or listening to financial news all week knows, tomorrow at 7:30 a.m. CST the Bureau of Labor Statistics will release the unemployment report, which has been deemed as the most important data since …….????? The consensus is now for a nonfarm payroll increase of 170,000, the RATE TO STAY AT 8.2% and average hourly earnings to increase 0.2%. After Wednesday’s ADP data, the market has lowered its NFP expectations and thus, a consensus number of 170,000 will be a positive for the EQUITY markets, positive for the DOLLAR and meaningless for the BONDS.
Posts Tagged ‘Sarkozy’
Notes From Underground: No Box Can Contain These Thoughts
April 30, 2012First let’s dispense with the market data:
1. Tonight at 11:30 p.m. CST the RBA will announce its interest rate decision. The market consensus is for a rate CUT of 25 BASIS POINTS from 4% from 4.25%. There are a few analysts looking for a 1/2% CUT and from looking at the near term curve inversion that is not a far-fetched concept. The overnight/2-year curve is inverted by 125 BASIS POINTS so a larger cut would help correct this inversion. (Not a bad idea for an economy that is slowing and the Aussie Treasurer has made known his desire for raising taxes to help repair the BUDGET DEFICIT that has arisen during the last four years. An anticipated 25 basis point cut be market neutral while a 50 basis point cut would lead to an immediate selloff of the Aussie dollar. More important will be the RBA‘s STATEMENT as our readers know that Governor Stevens is a very astute analyst of the GLOBAL ECONOMY, so listen for any mention of an AUSSIE FEAR OF A SLOWDOWN IN CHINA.
Notes From Underground: If You Go Chasing Rabbits
April 23, 2012One Pill Makes You Larger
And One Pill Makes You Small
And the ones that mother gives you
Don’t do anything at all
Go ask Alice
When She’s Ten Feet Tall
Nothing like spending four days in Berkley to see the world as allegory
Notes From Underground: Bank Of Canada Holds Rates Steady at 1% (No Surprise There)
April 17, 2012The BOC announced that rates will remain on hold and the Canadians will watch to see what happens in Europe as an important indicator of bank policy. It is unanimous that all central banks are concerned about the economic situation in Europe. Even the Chinese have noted the deterioration in Europe as a reason to be cautious about trying to slow the economy too quickly. However, in a confusing headline, “IMF PREDICTS MODEST GROWTH AS EUROPE STARTS TO EXIT RECESSION,” the Washington Post seems to think the worst is over for Europe. This headline is off base as the body of the article reveals, but such is the crap that drives the markets. IMF Managing Director Christine Lagarde is begging for increased funding for a bigger firewall for Europe and then this headline appears. Which is it: Crisis averted or further vigilance and action necessary to calm the European debt markets?
Notes From Underground: Let’s Assume We Have A Can Opener…
April 15, 2012As regular readers of NOTES are well aware, I have been very critical of market participants like George Soros and their sanguine views of the European DEBT CRISIS. Many analysts like Jim Cramer have spent the last years waving the debt problem away. First, it was Greece was too small to have an impact on Europe. Ireland was too small and besides was ring-fenced by a bad bank structure. Portugal was smaller than Greece, thus nothing to be concerned about. Italy and Spain were possible problems but many were listening to the flirtations of the Chinese, who, time after time, made solicitations about purchasing European Debt. (By the way, we still haven’t seen the Chinese Sovereign Wealth Fund enter the fray.) If all else failed, European financial leaders were too exposed to the EURO to allow the European Monetary Structure to collapse. Germany would not allow the work of Helmut Kohl and others to be just another failed attempt at a unified Europe.
Notes From Underground: Bill Gross Goes Biblical … Sort Of
April 5, 2012In a comment directed toward the European peripherals, Pimco’s Bill Gross said that Greece was a zit, Portugal a boil, and Spain a tumor. Readers of NOTES FROM UNDERGROUND know that Spain has been on the radar for a long time. The growth numbers or lack of growth, rather, hampered by severe austerity budgets have generated ADVERSE FEEDBACK LOOPS that have rendered all economic projections null and void. When austerity bites, all growth forecasts are cast asunder. Staying with Gross’s almost biblical references, I suggest looking at Europe though the lens of the TEN PLAGUES.
Notes From Underground: A Visit to February 5 (Sometimes A Reminder Is Necessary To Clear The Stain Of Bad Execution)
March 15, 2012The world is carrying on in its design of vast pools of liquidity in a “sea of tranquility” … for the moment. Are Europe’s problems solved as the FRENCH ROOSTER Nicholas Sarkozy has crowed? Absolutely not. The travails of debt plagued economies will begin for the nations living on the IBERIAN PENINSULA. As I have argued for a long time in this BLOG, Spain is a far worse problem then Italy but Italian BONDS suffered as they were the only FUTURES HEDGE AVAILABLE FOR THE PROBLEMS OF THE GIIPS.
Notes From Underground: OPA! Time to Drink Some Ouzo and Reflect on the Greek Situation
February 13, 2012Europe was/is/will be the catalyst for the markets, from equities and commodities to, of course, currencies. Whether the problems are violent strikes in Athens or insolvent banks in France and Spain, the issues that PLAGUE EUROPE ARE EXISTENTIAL IN NATURE. Can the problems of sovereign default and the deflationary impact rippling from a massive deleveraging be contained by a massive douse of LTRO or QE3 in the U.S.? For now the markets are CONTENT to allow the flood of liquidity be the potion for increased portfolio risk.
Notes From Underground: The Markets to Bernanke–CAN YOU HEAR ME NOW?
January 29, 2012Post-FOMC meeting it seems the FED move is fraught with all types of dangers as the even all the bitterness and acrimony flowing out of the loose lips of EUROCRATS could not prevent a slide in the U.S. DOLLAR. FED AGGRESSIVENESS AND ITS FINANCIAL REPRESSION TRUMPS THE LUNACY THAT IS EUROPE. It is apparent that the FED‘s policy is to push U.S. rates lower across the entire curve–WE KNEW THAT–and to get ahead of any political criticism that is surely to arise as Chairman Bernanke appears before the House Budget Committee on Thursday. Paul Ryan will certainly give Mr. Bernanke a difficult time as the republicans will want to make the FED and its policies part of the election debate.
Notes From Underground: Unemployment, No Surprises
January 8, 2012The unemployment data released on Friday revealed no great surprises as the nonfarm payrolls were right in line with consensus. The markets also offered up no real divergences from the norm as the S&Ps rallied but by day’s end the U.S. equities closed basically unchanged (although the NASDAQ continued to outperform all other indices.) The EURO currency dropped further and wound up losing 1.7% for the week even while the S&Ps gained 1.7%.