Yesterday the screen watching and the trading became so exhaustive that my eyes glazed over and all of the quote boxes began melting together as if Salvador Dali was painting what I was analyzing and trading. Trading fatigue has definitely set in as the world moves from crisis to crisis and back again. The amount of news that gathers on my screen every hour reminds me of being back in graduate school, except that the tension now and the speed at which it arises overwhelms the mind. Not complaining as this is the way I have chosen to make my living.
Posts Tagged ‘Trichet’
Notes From Underground: Intervention where is THOU STING
August 4, 2011Yesterday the Swiss National Bank surprised the markets by lowering overnight lending rates to basically ZERO–the nearby 90-Day EUROSWISS contract (Sept. 2011) traded for 2 basis points–or, 0.9998 for those keeping score. The SNB also pledged to increase sight deposits from 30 BILLION SWISS to 80 BILLION SWISS, a very aggressive liquidity add, all in an attempt to stem the rise in the FRANC. By the end of the trading day the SWISSIE recouped most of its overnight losses in an act of defiance.
Notes From Underground: SettingThe Record Straight … Fair is Only a Line in Baseball
August 2, 2011The word out of Washington about the BUDGET RESOLUTION is that taxes ought to be raised out of fairness. The President of the U.S. is consistently talking about fair. Give up that specious argument. Is it fair that the savers of this country are being punished so as to bail out the WALL STREET TOO BIG TOO FAIL BANKS? Is it fair that an incompetent Treasury Secretary was allowed to obtain the Treasury position even though it appeared that he cleverly tried to avoid paying taxes? Is it fair that the Wall Street banks were bailed out while mortgage paying homeowners were granted no relief against the coming exploding ARMS mortgages that have worsened the foreclosure problems and continued being an albatross around the neck of the economy?
Notes From Underground: IT IS THAT TIME OF THE MONTH AGAIN? (TO VIEW THE PAINS OF LABOR)
July 7, 2011Yes, the ECB raised rates today and Trichet failed to listen to the wisdom offered by NOTES FROM UNDERGROUND. That means I have overestimated the wisdom of Trichet while underestimating the size of his ego. The rate rise to 1.5% was widely anticipated so the EURO was immediately sold but regained some strength after the ECB announced that it was WAVING THE MINIMUM CREDIT RATING FOR PORTUGUESE BONDS USED AS COLLATERAL FOR REPOS. As the ECB raises rates, it allows for weak collateral to be utilized thus allowing for a large liquidity infusion. This is a fine example of Dostoyevsky’s Grand Inquisitor as bread is taken from the people with one hand and returned to them with the other and the people believe it is a miracle. Europe has become a “ball of confusion.” Why raise rates when you are simultaneously lowering credit standards to prevent a sovereign default?
Notes From Underground: Trichet, the Lame Duck, Provides Lame Rhetoric to Duck the Serious Issues
June 9, 2011It is time for the ECB president to leave the scene as he is losing the credibility that he has labored so hard to construct. Mr. Trichet delivered the widely expected phrase “STRONG VIGILANCE” in his post-ECB monetary policy press conference. The EURO made its high for the day on the utterance of the words “STRONG VIGILANCE” but sold off quickly as Trichet emphasized that the ECB does not signal a guarantee on future interest rates. The guardian of EURO monetary policy desired to keep the markets off-balance.
Notes From Underground: Bernanke’s Suatainable Trajectory
June 8, 2011The FED chairman delivers a major address on the economy at the International Monetary Conference hosted by the Atlanta Fed. It seems that the FED is content to stand behind the veil of its dual mandate. Bernanke did a great deal to explain away the transitory nature of commodity price increases, while maintaining that the economy recovery is too fragile and unemployment too lackluster to begin removing the language of … “economic conditions are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” This is very consistent language and unlike the way the S&Ps reacted to the chairman’s speech, I believe that Bernanke’s language was very soft.
Notes From Underground: King Checks, Trichet raises but signals he is not necessarily a serial raiser
April 7, 2011As expected, the Bank of England held rates at 50 basis points and the ECB moved to raise rates to 1.25 percent. BOE Governor KING does not hold news conferences post-announcement so we will have to wait to find out if the MONETARY POLICY COMMITTEE (MPC) voted 5-3-1 again. Also, with inflation in the U.K. above the targeted level, Mr.King will be writing another to the ECHEQUER to explain why the BOE kept rates at the present level and held back from raising as prescribed by its mandate.