Posts Tagged ‘Wolfgang Schaeuble’

Notes From Underground: Who Gets Eaten and Who Get’s to Eat (Sweeney Todd)

October 15, 2017

As Stephen Sondheim wrote in the dark musical Sweeney Todd, “What’s the sound in the world out there. It’s man devouring man. The history of the world, my sweet, is who gets eaten and who gets to eat.”

I open with this thought in regards to a wonderful op-ed piece in the Barron’s over the weekend by John Curran titled, “The Coming Renaissance of Macro Investing.” Curran has the pedigree of writing this piece as he served his time at one of the greatest global macro funds, Caxton Partners. There are no greater thinker/traders than Stan Druckenmiller or Bruce Kovner. When it came to understanding the role of foreign currencies in creating investment opportunities Kovner is the wisest I have ever had the pressure to read. The last 10 years have been difficult for the global macro discretionary crowd but as John Curran suggests the winds of change are blowing. This is also a theme I have been discussing of late. The big difference in my opinion is that short-term trades will morph into momentum investments.

(more…)

Notes From Underground: Which Spark Will Start the Prairie Fire?

September 27, 2017

In several blog posts over the last eight years I have used the words of Mao to relate to the potential issues that could cause severe disruption to the global financial system. If you listen to the narrative propagated by the mainstream financial media your concerns would revolve around North Korea, the Trump tax and healthcare plans, the FED starting QT (or else citing the Fed’s ridiculous dot plots), concerns about the potential shutdown of the U.S. government, the economic implications of Brexit, etc. The bottom line is that all the forecasters have been wrong for long as Phillip Tetlock revealed in his wonderful book, Superforecasting. The FED has been worshiped as all-knowing fonts of wisdom when nothing they have forecast has proven correct. Yesterday, Fed Chair Janet Yellen admitted that the FED is as confused about the lack of inflation as most of the prognosticators on Wall Street. This confirmed my theory that what the FED peddles IS NOT ROCKET SCIENCE.

(more…)

Notes From Underground: The Circus Has Left Town, Time To Clean Up The Manure

October 16, 2013

The budget negotiations and political maneuvering that have clogged the airwaves and the capital flows are now kicked further down the road and financial markets can again resume crunching data and analyzing fundamentals and technicals. It became a distraction as the television pundits and anchors opined on the impact of the “Washington Standoff.” The worst part of the entire drama was the constant parade of corporate CEOs warning Congress about the damage being done to the U.S. economy.

(more…)

Notes From Underground: The FED Is on the Horns Of a Bullish Dilemma

September 17, 2013

If the FED deems the market to be healthier than conventional wisdom it will TAPER to the high-end of market expectations–$20 billion and probably in Treasuries, not MBS as of now. A supposition must be made: If the FED were to do nothing, would the stock market first rally and then break as investors fear that the FED is afraid of a weaker economy in the months ahead? The FED therefore has to TAPER so as not upset the positive spin that has helped the stock market and other assets rally. Because the FED HAS TO TAPER¬†the emphasis will be on academia’s newest catch phrase: FORWARD GUIDANCE. This phrase has been all the rage in the ECB, Bank of England and the BOJ press conferences. Its main thrust is that the central bank can DIRECT market behavior by talking the global economy into a glide path of growth by promising the continued supply of easy money and low interest rates.

(more…)

Notes From Underground: Schaeuble Proves Why 2+2=5

July 25, 2012

In the realm of loving and promoting the irrational over the rational expectations of the MODEL BUILDERS, there is no better poster child than German Finance Minister Wolfgang Schaeuble. As I warned Mario Draghi to unpack his speedo, today BLOOMBERG NEWS ran an article, “SCHAEUBLE DECLARES MARKETS WRONG AS EUROPE COASTS INTO VACATION.”¬†This is the German finance minister who has the audacity to proclaim that the markets are wrong and head off for vacation. It seems that the German hierarchy is convinced that all is well because the BUND market is healthy. Is Schaeuble so naive as to think that strong BUNDS reflect the health of Europe? Don’t German policymakers understand that the BUNDS and SCHATZ are at absurdly low levels because many other Europeans are “packing their suitcases” with EUROS so as to transfer their wealth to the perceived safety of the German financial system and thus for its haven status? It is astounding that the EUROCRATS believe that the markets will wait for the decision makers to return before any further market action will take place.

(more…)