Posts Tagged ‘LTRO’

2013/10/03: Commentary: Got that old ‘2011’ feeling back… and not just us!!

October 3, 2013 Leave a comment

© 2013 ROHR International, Inc. All International rights reserved.

COMMENTARY: Thursday, October 3, 2013.

 CNBC-OBAMAharwoodINTVW-131002Crisis? What US government funding crisis?

Uh-Oh… even the Prez is allowing this one ain’t good!! We don’t agree with a lot of what the President has put in place (in fact we disagree with most of it.) Yet he was right to caution that markets are likely being too sanguine in the face of these unyielding positions on both sides.

You’d think from the way the markets are behaving there is no crisis looming in the US. This could be a major bit of cognitive dissonance brewing for the investor class (including more than a few ostensibly well-informed fund managers.) What we are witnessing is a short term disconnect that most folks expect will be readily corrected, yet which might carry more dire implications even across the short term.

While not wanting to play Cassandra, this all feels a lot more like July 2011 Redux than anything seen in any of the mini-crises since then.

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2012/05/03: Weak data, France headed for Socialism, ECB against stimulus…

© 2012 ROHR International, Inc. All International rights reserved.

It seems the fundamental drivers for the markets are possibly headed for another significant disconnect. Yet the markets are ignoring it for now. Possibly that is because whether there is a dislocation in Europe will not be completely clear until after Sunday’s French Presidential election and Greek Parliamentary elections. However, that does not lessen the degree to which the mindset of the European people (and some European governments), the economic data, and the current stance of the European Central Bank might be at odds.

This has become more apparent through the French Presidential debate allowing Monsieur Hollande to maintain his lead over President Sarkozy. It is of course still possible that the current French head of state will attract enough votes from the Far Right to defeat the challenger in Sunday’s poll. Yet, we must admit that the prospect of the Socialist victory in the presidential election is creating far less concern in the markets than we might’ve suspected from yesterday’s Showdown at French Election Corral.

The consistent weakness of the international economic data (now including US ISM Non-Manufacturing Index) is making Tuesday’s strong US ISM Manufacturing Index ever more the outlier in a weakening global economy (as we had already noted yesterday.) While there might be a surprise in tomorrow morning’s (holiday delayed) European Services Purchasing Managers’ Indices, any further confirmation of weakness there will set a very negative tone into the important US Employment report.

That is already somewhat suspect due to the weakness of yesterday’s ADP private employment figure and this morning’s Challenger Job Cuts pushing up once again. Whatever else we may see, the prospect of further weakness in economic data would seem to justify the “growth” versus austerity agenda of those on the Left. And yet, at today’s post-rate decision press conference ECB President Draghi seemed far more focused on reform rather than any further stimulus. And that is just the sort of thing that might leave the central bank on the opposite side of popular rejection of austerity…

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2012/03/08: When is today not today? When it’s PSI participation results!

March 8, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Yes indeed, today is the deadline for the next European Sovereign Debt Crisis decision: PSI (Private Sector Involvement) decision on whether to participate in the ‘voluntary’ dilution of the value of their outstanding Greek bonds. Regardless of how that turns out, we must say it’s refreshing to finally actually have a bona fide deadline of any sort for what has been the otherwise amorphous European success in simply “kicking the can down the road.” And yet, in terms of its actual impact on the markets, it really isn’t actually, officially today that counts

…because the 20:00 GMT (15:00 EST; 14:00 CST) deadline for bondholders to decide is not the moment we will find out the actual results. Those will be announced Friday at 07:00 CET (Central European Time: 06:00 GMT; 01:00 EST; 00:00 CST.) While it is probably fair to allow some time to review the results after the formal deadline, this just shifts one more of the intensive late week influences we had highlighted at the top of the week for today into tomorrow into the last trading day of the week.

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