Posts Tagged ‘Wheeler’

Notes From Underground: Some Quick Hits Before the FOMC

April 28, 2015

Tonight is a brief set of bullet points as I have been sidelined with a sinus infection from the high pollen counts. But the world continues to spin (as does my pillow). The Greek situation continues on with the same cast of characters shouting at each other about prior promises made and the need to adhere to the previous economic and political efforts for Greek solvency. We are getting close to the end because Prime Minister Tsipras launched his final salvo with the Brussels Brigade. It is what NOTES FROM UNDERGROUND offered up as the third rail of European politics: SYRIZA WILL CALL A REFERENDUM ON ANY DEAL STRUCK WITH THE TROIKA.

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Notes From Underground: What Has the Bank Of Japan Wrought?

November 2, 2014

Late Thursday night, the BOJ surprised the markets with an acceleration in the pace of increasing the monetary base. The bank will increase its asset purchases to 80 trillion yen from a previous annual amount of 50-60 trillion yen. The bank will also purchase ETFs and J-REITs at an added 3 trillion yen a year, a massive amount of increase of its balance sheet. In Japan the BOJ‘s program is referred to as QQE for it is both a quantitative and qualitative program. As it is pointed out, the BOJ will wind up owning 75 percent of the JGB market as banks and pension funds unload BONDS onto the ultimate buyer of last resort. When Japan was in a deflationary economy, owning BONDS made perfect sense as negative prices gave rise to REAL HIGHER YIELDS.

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Notes From Underground: Pritchard Raises An Important Issue– Is China Exporting Deflation?

April 24, 2014

The equity markets were gaga over the news from Apple and Facebook and trying to push through March’s highs when Twitter was busy raising the issue about a possible Russian incursion into Eastern Ukraine. The “breaking news” failed to gather strength and the markets were soon back into positive territory. Just as the equity markets were absorbing the Russian rumors, the precious metals were making recent lows on the back of stock market strength and better economic news from the U.S. For all you technical-oriented market watchers, the gold and silver both put in outside reversal higher days so we will watch to see if there is any follow through in the metals market tomorrow.

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Notes From Underground: Investing in the Time of Hilsenrath

October 30, 2013

In the biggest news story of the day, Jon Hilsenrath reported that New Zealand bank Governor Wheeler led his board to hold the line on interest rates. (NOTE: Hilsenrath didn’t report the New Zealand news as he was too busy trying to impact U.S. markets with a tweet here and a tweet there.) The RBNZ did note that the global economic recovery remains “patchy.” The KIWI bank seems content to allow rates to remain on hold for two major reasons: 1. The macroprudential regulations instituted to slow house price inflation need more time to work–New Zealand instituted regulations on loan-to-value mortgages; and 2. “The exchange rate remains high and is a headwind to the traded goods sector. Sustained strength in the exchange rate that leads to lower inflationary pressure would provide the bank with greater flexibility as to the timing and magnitude of future increases in the OCR. Fiscal consolidation is also expected to continue weighing on demand over the next few years.”

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