Posts Tagged ‘U.S. debt’

Notes From Underground: Though I Walk Through the Valley of Debt, I Fear No Evil

February 18, 2019

On Friday, U.S. 30-YEAR BONDS were the best performer as the 5/30 yield curve flattened in the face of several divergent asset movements. The GOLD rallied even as the stock markets rose around the world, so no need for haven status. The DOLLAR had actually been strong in the morning but as global stock markets rallied the DOLLAR was actually lower by late afternoon. So why was the 30-YEAR BOND the premier asset? I have no idea. Over the weekend there was a Yahoo Finance story in which Jeffrey Gundlach is quoted as speculating that long-end U.S. Treasuries will see 4 percent yields later this year.

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Notes From Underground: And To All a Good Year

December 23, 2018

We are heading into the last trading week of the year and it’s setting up to be volatile, to say the least. The FED is in motion. Equity investors are harvesting profits from a long-run bull market. Bond markets are uncertain as how to react to the end of QE since the central banks are now beginning to shrink global reserves (at least the Fed is). Commodity prices are struggling due to the fear of a global economic slowdown. And the political backdrop adds great uncertainty as the Trump administration never misses an opportunity to open its mouth and detract from any policy success it may experience. China, Russia, Turkey, Iran and even Saudi Arabia are watching the Western Democracies to see how they respond to Trump’s efforts to disrupt the current trading system and, more importantly, the rollback of PAX AMERICANA.

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Notes From Underground: BRUSSELS TO WASHINGTON–HOW MANY ROADS CAN A CAN BE KICKED DOWN?

July 24, 2011

Last week, the Eurocrats tried to persuade the markets that it has gathered the strength to deal with the DEBT CRISIS IN earnest. But even with three days to analyze and digest the statements it is still not clear as to how the actual bailout will work. The ultimate question: Who will guarantee all the good credit being established that will allow the EFSF to do its job to insure the markets against sovereign default??

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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: Bernanke Testified On The Hill and Proved to be no FOOL

July 13, 2011

It was time for the FED Chairman to make his legislated appearance to Congress and Mr. Bernanke rightly refrained from being dragged into the battle over the budget. I have criticized the FED Chairman more than a month ago when he offered an opinion on the budget resolution. Fiscal issues are the purview of CONGRESS and the FED risks its independent stature if it wants to opine of the CONGRESSIONAL PREROGATIVE. Congressmen and women tried to get Bernanke to wade into the muddied waters and finally he flippantly said that legislators get paid the “big bucks” to make fiscal policy.

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Notes From Underground: Remember, Ben Bernanke is a ’37er and he Promised MIlton Friedman

June 2, 2011

Tomorrow comes the most important data point for the markets as the BLS releases the monthly unemployment report. Yesterday, the market was abused by the ADP employment info, which was much weaker than expected and lead to a selloff in all asset classes. A quick gaze upon the closing CQG quote board lent credence to the line from Apocalypse Now: “I love the smell of deflation in the morning.” Of course, I jest as I substitute DEFLATION for NAPALM but the use of either causes major destruction. The ADP data was able to cause so much angst because it followed very weak housing and manufacturing numbers released during the previous week. The CONSENSUS for Friday’s UNEMPLOYMENT REPORT is for: NONFARM PAYROLLS of 155,000; the jobless rate to hold at 9.0%; and average hourly earnings to show a gain of 0.2%.

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Notes From Underground: S&P’s Downgrade … Where’s the BEEF??

April 20, 2011

The markets were roiled by the S&P DOWNGRADE of  the U.S. DEBT  outlook to a “negative” while maintaining the AAA rating. This really could be of no surprise to those who follow the markets closely. The initial reaction was to sell the equities and BONDS. The surprise was that the U.S. DOLLAR was bought aggressively. All of these  trades were short-lived as the S&P closed against recent highs today and the BONDS rallied back immediately on Monday although they have softened with the strength in the EQUITY markets. The DOLLAR was purportedly bid because of the FINNISH vote on Sunday night and of rumors of a GREEK restructuring.

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Notes From Underground: I will “Badger” Andy Stern on the issue of Undefunded pensions

February 18, 2011

No real surprises on the data releases yesterday. The U.S. inflation numbers were much as expected but all the DEBT futures markets rallied as it seems the shorts in the markets are nervous about new uncertainties in the Middle East. One would think that the equities would have been sold and the DOLLAR bought for safe-haven purposes, but this was not to be the case. The  DOLLAR safe-haven status is breaking down on a correlative basis, throwing all the “talking heads” into a confused state. As I continually warn the readers of NOTES, markets are dynamic in data usage and always in flux and for those who stay static in thought, I merely offer a shoulder on which to cry. What is bothering the markets?

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