Posts Tagged ‘SOMA’

Notes From Underground: Au Revoir, Marine Le Pen

May 8, 2017

Now we can finally put the French elections behind us as its citizens maintained the status quo and elected Emmanuel Macron to a five-year term. Parliamentary elections follow in June but the two main parties, Socialists and Republicans, aren’t expected to face challenges. But, if the more conservative Republicans gain control of the Parliament and the prime minister post it will force Macron to move further to the right-center. If Macron moves away from the Hollande Socialist camp it will result in political protests from the Left. Macron will experience a difficult presidential term if the government is gridlocked by continual demonstrations. The German chancellor is going to ask a great deal from Macron: fiscal austerity, as well as a restructuring of the French domestic economy.

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Notes From Underground: The Fed, Simon Potter and the Sorcerer’s Apprentice

April 15, 2015

Another day of market volatility caused by __________ (fill in the blank). It seems that many pundits and talking heads have a cacophony of excuses for the recent bout of market moves that seem to be random and non-correlative. Poor economic news begets DOLLAR SELLING, SPOOS RALLYING AND BONDS GOING EVERY WHICH WAY. Throw in the recent erratic behavior in OIL and PRECIOUS METALS  and all previous relationships are, for the moment, non-existent. The FED has been warning that BOND markets are subject to severe volatility because markets fail to respect the FOMC‘s views on economic growth and the need to raise rates sooner than investors appear to want to believe.

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Notes From Underground: The Biggest Loser If The Fiscal Cliff is Activated? Ben Bernanke’s Fed.

December 3, 2012

It seems that if the Washington politicos fail to reach a resolution on preventing a fiscal crisis, the biggest loser will be the FED. The U.S. central bank is on record as pushing for continued monetary ease as long as unemployment remains unexpectedly high. The recent definition as forwarded by some Fed Governors and Presidents is around the 6.25% rate of unemployment. If the fiscal cliff is realized, projections are for the jobless rate to rise to between 9.5 and 10.0%. The question for the global financial markets will be: What is the FED‘s response going to be in an effort to counteract the renewed contraction in the U.S. economy?

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Notes From Underground: Yesterday Don’t Matter If It’s Gone

March 1, 2012

Wow! Wednesday’s market reaction to words not said was extraordinary. The LTRO went very much as expected and the selloff in the EURO was in step, but the reaction of the GOLD and SILVER to unspoken words was quite unusual. Many questions were raised as to the market reaction. The GOLD sell off is rational if the premier haven was elevated simply on the belief of further easing by the FED.

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Notes From Underground: Better Data Leads to More of the Same

October 3, 2011

Global equity markets were battered for another day as investor fears continued to outweigh any desire to add risk to portfolios. All U.S. data releases were better than expected and even auto sales proved to be a million more units above consensus on an annualized basis. The equity markets did try to rally but the attempt was short-lived and by market’s end the selloff was greater than 2.5%. Commodities were soft and the DOLLAR continued to rally on its haven status. The BOND market saw the impact of the “TWIST” as it is now October and the SOMA (SYSTEM OPEN MARKET ACCOUNT) began its work on affecting TREASURY DURATION.

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Notes From Underground: The Europeans delivered on a bailout of the Peripherals (Maybe So, Maybe Not)

July 21, 2011

After reading through the vast amount of news on the Brussels “emergency” meeting, I am not sure I truly understand what the final outcome of the European resolutions for financial stability entail. There are bond swaps on Greek debt, which will mean a soft default, and then there is an increase in the size of the EFSF funding and a move to allow the  buying of secondary sovereign bonds. Again, it is not so easily to understand at this juncture as so much contradictory information is being provided that the final agreement doesn’t appear at this time.

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Notes From Underground: Pimco calls for some of the PIIGS to leave the STRAW HOUSE AND HIT THE BRICS

December 20, 2010

A note from Andrew Bosomworth, head of Pimco’s European Portfolio, suggests that Greece, Ireland and Portugal would be better off leaving the euro currency until they get their houses in order. Bosomworth wrote it will be difficult but it can be done and the currency devaluations that will be part of exit will aid the PIG in its attempt at economic recovery.

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Notes From Underground: TEGWAR and Bernanke puts out to sustain the Greenspan PUT

November 4, 2010

Ok.OK. We got it —the FED did not wish to anger Mr.Market so he presided over an 11-1 vote for the further Quantitative Easing by another $600 billion spread throughout the next eight months. It was interesting to see that the DOLLAR rallied at first and that GOLD and other commodities were sold off. The S&Ps and other equities tried to break but they realized that BEN BERNANKE is the greatest thing, well, since SIR ALAN GREENSPAN. It seems that the FED has totally fallen into the trap of perpetuating the wealth effect to keep the economy from falling into a deflationary  spiral. No matter how we look at this, the importance of EQUITY market gains is paramount as the FED believes that this is the key to unleashing the “animal spirits” that are necessary for capitalism to thrive.

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