Global Macro

9

Japan’s critical moment

An hour ago the IAEA released the following: Temperature of Spent Fuel Pools at Fukushima Daiichi Nuclear Power Plant Spent fuel that has been removed from a nuclear reactor generates intense heat and is typically stored in a water-filled spent fuel pool to cool it and provide protection from its radioactivity. Water in a spent

5

The safe haven meme

There’s more argument today that the Australian dollar is now a global safe haven currency, which, I must admit, agitates my innate cringe gene. Let’s see if there is any evidence. First, the following graph is the last six months of futures movements for traditional safe havens by percentage: The $US is green, Japanese yen is

4

Japan Update 2

The situation in Japan seems to have just got considerably worse. From the BBC live feed. 0325:More on that news conference by Chief Cabinet Secretary Yukio Edano. He said: “At around 0830 today, at Fukushima Daiichi nuclear power plant, white smoke has been seen coming out of reactor three. And regarding this, currently we are

21

History resumes

I remember the nineties fondly. They were the years before housing bubbles. The years when cricket still had meaning and moustaches were not yet the gimmick of some new age fad. The years when talent still determined who became famous. And the years when the singularity of American might gave the world a moral centre,

10

Japan Update

Update: European markets are also getting hammered . See BBC for more. It seems that only the stock market has realised what the hell is going on. I captured this on my phone earlier in the day, the Nikkei closed down 10.55%  after BOJ intervention. But it just seems absolutely bizarre that I am even discussing

4

Japan: Suddenly it seems much worse

There is a now  constant stream of slowly worsening news coming out of Japan.  As H&H linked to in a recent post the expected outcome of the Boiling Water Reactors should be far less worrying than what is being reported. A quick check of the BBC feed shows some chilling details of what is believed

3

High risks

The US equity market held up pretty well last night but looks to me to be are underestimating risks all around. Poor Japan seems headed toward mutliple meltdowns. Live coverage is available at the BBC. New Scientist reports that assuming meltdowns are occurring then it is only a question of whether containment of the radioactivity

0

Not today

There is so much to say on the financial front about what is happening in the world right now. China finally seems to be making the right noises about its movement towards consumer led economic growth, take it or leave it.  Bahrain has erupted again and is now asking for its much larger neighbour to step

2

Into the maelstrom

Let me begin my reiterating my sympathies for the Japanese. There are a number of very big cross currents at work for markets today. The first, of course, if the suffering of the Japanese. Across the world, the coverage is remarkably alike, a result perhaps of diminishing foreign correspondent budgets and the secrecy of the

10

Did “endless growth” just end?

First, a few quick notes of congratulation. To my esteemed colleagues, Delusional Economics, who has been cross-posted in full glory at Naked Capitalism for his scything critique of Greece’s travails. And Rotten Apple, who made the links (also at Seeking Alpha) with his take on long term investing and gold. Our long-planned reverse takeover of American

15

Spiralling into the moussaka

From the morning links: Explosive growth of unemployment recorded in Greece, with a total number of unemployed is at 733,645, according to data from the Greek Statistical Authority (ELSTAT) that were released Wednesday. The percentage of registered unemployed reached 14.8% in December 2010 an increase of one percentage point compared with November. The number of

0

Revenge of the PIIGS

Overnight, markets received a boost from OPEC member’s declaration that they’ll fill any existing or potential supply gap. Later, there was some doubt about the veracity of the claim. The energy complex nonetheless retreated a little, as did gold, and equities jumped. Metals were sold off early then bounced to be even. However, other markets remain

5

Gold, Silver and Oil Ratio

As part of my “Crashlist” I regularly follow the spot price (in USD) for gold, silver and oil as they are the three benchmarks that measure the strength of the global economy, the value of the US dollar and the speculative excess inherent in modern global markets. Bullion Baron has some great insight into these

6

Sell signal

I don’t know if you trade, but if you do, there are clear reasons to get cautious. There is a gathering storm over the global economy and market patterns are now making it plain that the risk of a lightening strike is outweighing the benefits of remaining outdoors. Regular readers will know that I have

10

Europe’s continuing mess

I have not spoken about the European Union’s economic mess for some time. In fact I don’t think I have mentioned it since we began MacroBusiness. For readers who have not seen my previous posts on the subject my discussions revolve around my opinion that the 17 Euro nations have a macro economic architecture that is fundamentally broken. For reasons only explainable

3

Is Bernanke blowing another bubble?

Fed Chairman Ben Bernanke mounted a spirited defense of quantitative easing on Tuesday in his semiannual monetary policy report to Congress, arguing that it’s effects were little different to conventional monetary policy: Large-scale purchases of longer-term securities are a less familiar means of providing monetary policy stimulus than reducing the federal funds rate, but the

4

The next domino

Predicting economic outcomes is hard. Predicting economic outcomes in conjunction with political unrest is impossible. Especially if that unrest is at the centre of global energy production. At least, that is the conclusion one should draw from last night’s US selloff. Rumours of Saudi unrest are flying, without much substantiation. Ongoing protests are planned in

6

Is gold the new global reserve?

Someone else has finally noticed that a sea change has transpired in forex markets during the oil crisis. As this blogger noted last week, the $US has not enjoyed its traditional safe haven role on the flight to safety trade. Sovereign Man picks up the theme today to argue that this is the end for

11

A new “flation”

The sudden rise of the oil price has thrown a cat amongst the monetary pidgeons. Very respectable and noteworthy watchers of the global economy are at complete loggerheads about where we now are in the business cycle. The various “flations” – in, re, de, dis – are being bandied about but nobody, so far as

0

Crazy Korean Banking

Yesterday I posted about the silent Korean bank run. Today I note that the issue that never existed is fading away. The turmoil in the savings bank industry seems have stabilized for now, but that hasn’t stopped participants from finger pointing over the cause of the crisis. After the Financial Services Commission announced its decision

3

Geopolitical risk: don’t forget China

Investors are nervously watching the situation in Libya unfold this week as fears grow that the unrest could spread to larger neighboring countries like Saudi Arabia, disrupting the supply of oil.  Oil rose above $100 a barrel in New York today, while one investment bank predicted that if Libya and Algeria alone were to halt

1

Bad news is good news

It may feel like chaos today, but at least according to markets, it isn’t. There is a pattern to what is going on. It isn’t all that reassuring but it isn’t running for the hills, either. The markets that are getting hammered the most are those that have run the farthest: S&P500, copper, iron ore.

3

ANZ dodges Korean bullet

A few weeks ago the The Age reported that Koreans were roasting Mike Smith for his lack of business finesse in the Asian market. ANZ has not just stumbled in its attempt to strengthen its footing in Asia but also has spoiled its image, being trumped by Kim Seung-yu, chairman of Hana Financial, which has

5

1989 redux

In 1989 a wave of populist uprisings threw communism out of Eastern Europe and, ultimately, Russia. Today, we have a similar situation developing across the Middle East. The cultures and political systems differ, but what seems to have been similar to date is that the roots of discontent have been popular enough. Different nations are

13

Gordon Gekko is driving the Death Star

Here we go again. The “US is in trouble because of its soaring debt.” An oldie but a goodie. My estimable fellow bloggers are wringing their hands over the apparent vulnerability of the American economy as all those wicked Chinese buy up US Treasuries.  All very worrying, except that it doesn’t matter. Why? Because what does

5

Will Ben print again?

With June and the end of Federal Reserve bond purchases fast approaching, the question that must surely be growing in the minds of global traders, policy-makers concerned about food inflation or anyone that gives a hoot about Australia’s non-resource exports is ‘will Ben do it again?’ By that, this blogger means Ben Bernanke and the

1

Neocon’s revenge II

History, it seems, is not without a sense of irony. You may recall that September 11, 2001 marked the rise in the US of a new breed of foreign policy hawk: The Neoconservatives. The stated goal of the ‘Neocons’ was a “Project for a New American Century”. Their principles were laid out in 1997 in

10

Guest post: La Niña, the black swan

This week’s disastrous floods in Queensland have tragically claimed many lives in addition to leaving thousands homeless and without businesses to return to, but the biggest cost economically may be felt abroad. I’m not talking about reinsurance here – though that is indeed an issue considering the estimated $5 billion damages bill – but about

5

Uh oh, euro

Yes, that pattern could be seen as a nice head and shoulders top for the euro. No surprise, really, with Europe’s bail-ins rolling inexorably toward Portugal. As FT Alphaville illustrated so nicely overnight: …it took Greece and Ireland less than a month to request EU/IMF aid after their 10-year bond yields breached that all-important 7

0

Delusion everywhere.

Looks like the bears are back into hibernation for the short term, Europe’s banking fairy tale seems to have gone down well, (let us all ignore Hungary for a while ) and has done the same delusional good work that the US banking fairy tale did. Lets hope those central banks keep their pedal on