Posts Tagged ‘Swiss Franc’

Notes From Underground: What Has the Swiss Wrought (Or Why 2+2=5 Is the Paradigm of Global Macro)

January 15, 2015

We at Notes From Underground have been pondering the global macro landscape and waiting for the inevitable ECB meeting January 22, and, of course, the Greek elections on Sunday, January 25. While waiting for some sensibility from the EU, the SNB abruptly ended its ridiculous intervention policy, which I have been criticizing for the past 12 months. My readers are well aware–as are followers of Rick Santelli–that I have questioned the wisdom of SNB support of the 1.20 EUR/CHF level.


Notes From Underground: The Air Is Too Thin In the Alps

December 1, 2014

The Swiss referendum on gold purchases, and, more importantly, setting a fixed GOLD/RESERVE RATIO of 20 percent was OVERWHELMINGLY defeated by a Swiss electorate suffering from a lack of oxygen reaching their brains. THE ALPS ARE TOO HIGH! Swiss citizens voted 78%-22% in opposition to the proposed referendum, thus maintaining the present policy of supporting the EUR/CHF floor at 1.20 and continuing the building of massive reserves. Two outcomes tell us that the market was underwhelmed by the vote and that is the EUR/CHF remains at 1.2030 and the GOLD market reversed last night’s early selloff and closed above last Wednesday’s high of 1.201. The EUR/CHF should have been well bid today following upon the Swiss voters supporting the SNB in its endeavors to maintain the Swiss franc at a fixed level versus the troubled euro.


Notes From Underground: To the Readers of “Notes From Underground”

November 26, 2014

Happy Thanksgiving!

It takes readers to make a successful blog and I have been blessed to have readers who are able to add to the discourse that makes for profitable investments and trades. There is no one source for all the answers and a healthy give and take provides for better strategy. Alternative views sometimes urge caution and better trade selection then a one-sided discussion with myself. Again, my wishes to you for a Happy Thanksgiving. I am going to be on with Rick Santelli on Friday morning to discuss whatever he wishes. Hopefully, we’ll discuss SNB, Draghi and whatever else. If any readers have any burning issues, post them in the comments and hopefully they’ll get covered in a very tight time frame.


Notes From Underground: To Print or Not to Print (For the BOJ and SNB)

November 24, 2014

In the time of “secular stagnation,” the burden of economic policy has fallen on the world’s central bankers. Whatever the question of economic malaise the answer is to print money and stave off the fear of deflation. This is why Ben Bernanke was the captain of the ’37ers, the cadre of central bankers who learned that the mistakes made by the U.S. Secretary of Treasury and the Federal Reserve would not be repeated. As it goes, it is easier to stop inflation then it is to prevent the pains of a deflationary spiral. The central banks of all the developed world economies are in full stop deflation mode. Thus, when in doubt, PRINT.


Notes From Underground: Another G-20 Communique … Yada, Yada, Yada

November 16, 2014

The gathering in Brisbane, Australia provided a backdrop for the world’s leaders to reveal their warm and fuzzy sides to the cameras as koalas were distributed for “hugs for the home folk”–see we really care about nature and the environment. As usual, the G-20 meeting ended with the release of a leaders’ communique, which provides areas of future “cooperation” for the global hegemons. The typical areas of concern about the environment and the diminution of fossil fuels are stated, as are areas of concern about the international tax system and globalized funding of terrorism and money laundering.


Notes From Underground: Solid Unemployment Report Yet Perplexing Market Reaction

November 9, 2014

In the recent blog post I opined that the nonfarm payrolls (NFP) would be above the long-hoped for 300,000. The actual number was a “tepid” 214,000. The market was certainly anticipating a large addition for why else would the DOLLAR selloff and the BONDS have such a sustained rally. The SPOOS and other equity markets closed unchanged on the day–stronger for the week–but the post-jobs report reflected that it will take strong economic data to push equities higher in a world without FED purchases and a confused ECB. The strongest part of the unemployment report was the fall in the U6 data, which fell 0.3% percentage points to 11.5%. Unfortunately for Chair Yellen wages gained a slight 0.1% indicating little upward pressure on pay.


Notes From Underground: FED, Dealing Three Card Monte on the Potomac

December 19, 2013

In a bow to acronym manufacturing, I placed the idea of TAPER ON, TAPER OFF (TOTO). We got a taper but it was offset by the Fed’s forward guidance on the unemployment threshold.In the FOMC statement the FED clearly said, “The Committee now anticipates, based on the assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well PAST THE TIME that the unemployment rate declines below 6.5 percent, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal.” The emphasis on the phrase PAST THE TIME is to highlight that the Fed will keep moving the threshold on what will constitute an acceptable level of employment, if not in words but in deeds.


Notes From Underground: A “Portuguese Man of War” Enters Draghi’s Harbor and Fires a Shot

February 14, 2013

Two events roiled the currency market this morning. First, the GDP numbers out of many European economies were weaker than expected. The softness of European economic activity has stirred the complacency of recent buyers of EUROs and caused some unwinding of the EUR/YEN and EUR/GBP cross rates. The second event that unnerved recent buyers of EUROs was a comment by the ECB Governor from Portugal, Vitor Constancio. It was reported that Mr. Constancio said in response to recent Euro strength that “… negative rates always possible.”


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?


Notes From Underground: A Few Quick Hitters As the Market Returns

October 31, 2012

***The Canadian situation became more muddled today with the release of its GDP. BOC Governor Mark Carney and FM Flaherty would love to raise rates in an effort to halt the rise of private debt, but today’s GDP showed a 0.1% decline in growth for the month. It is a real dilemma as the strong Canadian dollar is impacting some sectors of the economy and thus a rate increase to stem credit growth will have a strengthening impact. The GDP release blamed the slowing global economy for the downturn but it has not impacted domestic credit growth because of ultra-low rates. How will the Canadians solve this dilemma as it wants to slow the housing sector to help forestall private loans? This conundrum will test Carney’s position as a leading central banker. Let’s watch to see if it is possible to head off asset appreciation without causing system wide economic pain. Greenspan and Bernanke claim it is not possible. Governor Carney, here’s your chance to help set central banking on a better course.