Posts Tagged ‘Wall Street’

Notes From Underground: 500 Days of Summers … NOT

September 15, 2013

As the markets were heading into the close on Friday afternoon, I noticed that silver and gold were rallying and the newswire failed to provide any headline for the a substantial price rise. (There was no Syria news or any other type of geo-political event.) The weekend news also failed to support the rally at least until a few hours ago when the Washington Post ran a headline announcing that Larry Summers had withdrawn his name for consideration for Chairman of the Fed. Many pundits have been maintaining that Summers would be quick to end the entire QE program and thus would have a negative impact on all asset prices. Nonsense in the first degree, but as a trader, the first rule is to respect prices. The removal of Summers has led to the U.S. dollar selling in early Asian trading as the anticipation is now the Fed will be under a Chairman more in step with the Bernanke method of central bank theory.


Notes From Underground: Economy to Ben Bernanke … It’s Not You, It’s Me

September 21, 2011

THERE WAS CERTAINLY NO SURPRISE FROM THE FED TODAY EXCEPT THAT THE FOMC STRESSED THAT THERE ARE SIGNIFICANT DOWNSIDE RISKS TO THE ECONOMY. It appears that this phrase caused the markets to sell everything after the release of the most important outlook for U.S. economic policy. The market’s response must have left Mr. Bernanke wondering just what the FED could actually do to lift the “animal spirits” of the investor and business community.


Notes From Underground: The Prophets at the FED relinquish record profits

January 11, 2011

The FEDERAL RESERVE gave its interest payments earned on the MBS and other securities to the U.S. Treasury as mandated and the media pundits were giddy. It’s very difficult to determine what this “profit” means. If the FED was forced to mark its massive purchases to market would there really be any gain? The FED would say that they can hold the securities to maturity but that would mean that they have no exit strategy from the Large Scale Asset Purchase policy–QE by any other name–and any talk of such exit plan would be mere rhetoric.


Notes From Underground: Markets Still On Holiday and Equities Party On

January 3, 2011

Many nations were still out today on banking holidays. The equity markets resumed their rally as U.S. investors clamored for stocks, especially for the high-quality, high-dividend yielders. Investors were caught off guard by the tax compromise between Obama and the Republicans. In the third quarter, many investors sold off the high-dividend-paying stocks as there was legitimate fear that Obama’s team would prevail in increasing the tax on dividends to 35-plus percent. When the Republicans gained control of the House and Obama looked for compromise with the new majority, the Pelosi crowd was forced to swallow their disdain for all things capital and fall in line with a chastened Obama economic team.


Notes From Underground: U.S. and Japan look to new sources of Rare Earth as they” Get Ready ” to China’s I am “Losing You”

November 1, 2010

The weekend news brought further acrimony between China and the developed nations as the Chinese have threatened to curtail the export of several import elements that are needed to manufacture high-tech products. The Chinese export 97 percent of the rare earth elements that go into military and electronic equipment. It will take some time for the world to find alternative locals and substitutes so China is able to flex its muscles and show how important it is to the developed world.


Notes From Underground: Greece is rated as JUNK; Risk came off and Mike Bloomberg is the most nervous man in America

April 27, 2010

There was no joy in watching the Senate hearings. It was amazing to watch the performance of the Goldman traders as they were caught off guard and appeared not to know how the global macro world really works. Senator Carl Levin was far more prepared in his knowledge and pressed his case–the issue was not Goldman but rather the entire Wall Street model. They were totally caught off by Levin’s knowledge and could not answer the questions that raised relevant issues about the entire financial architecture. The heads of Goldman seemed to throw these managing directors to face M1 tanks armed only with pistols.The accusatory nature of this political theatre is going to undermine the foundation of Wall Street as Main Street is going to be uneasy about the entire culture.