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2017/04/18 Commentary: Really HUUUGE!

April 18, 2017 Rohr-Blog Leave a comment

2017/04/18 Commentary: Really HUUUGE!

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Tuesday, April 18, 2017

Really HUUUGE!

After all of President Donald Trump’s campaign and early administration bombast, and seemingly more than occasional exaggeration (prior to adjusting whatever it was he said), it seems like there is at least one ‘Really HUUUGE!’ development. That is the MOAB: Massive Ordinance Air Blast bomb that he authorized the US military to drop on an ISIS Afghan cave complex last Thursday. At 21,000 lbs. (net 18,000 lbs. of TNT), which is not the largest bomb ever. However, even though Russia claims to have a bigger bomb at present and even the US Air Force T12 (44,000 lb.) developed after WWII was bigger, the MOAB (aka Mother Of All Bombs) is the largest ordinance ever actually exploded in a combat situation.

So we need to grant that the US President is not exaggerating this time if and when he refers to the weapon used in that Afghan cave strike as “Really HUUUGE!” Yet there are many other developments at present which are capable of either directly or tangentially impacting the markets which are also Really HUUUGE! We will only be touching on each of them in order to cover all of those important developments. Some have a direct market impact while others are a bit more subtle pending further developments. As the MOAB drop in Afghanistan followed the previous Tomahawk missile strike in Syria, those are combined into Really HUUUGE! Development #1.

That is due to the key factor we explored at length in last Wednesday’s Commentary: More Diametric post. That is the return to a geopolitical environment where what the US thinks and is ready to do matters. That is after eight years of the Obama administration’s almost guaranteed American inaction. As noted there, the idea that the actual use of military force (even in limited doses) is the key to commanding the respect of your allies and instilling a bit of caution in your adversaries seems to something that Obama either never grasped; or was so averse to the risks that he could not bring himself to take action.

Whatever the actual military impact of the recent US action may be, the ‘message’ to both US allies and adversaries is that the Obama Doctrine of ‘leading from behind’ (or as critics pointedly noted ‘hiding from behind’) is OVAH!! (in Italian street parlance.) As such, even beyond sheer MOAB size, the policy shift in indeed Really HUUUGE!

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged 2007, 2007 redux, adversaries, air, air strike, allies, analysis, bond, China, comments, confluence, Congress, Corbyn, currency, Democrat, economic, election, employment, equities, Erdogan, EU, Euro, Europe, fixed income, force, Foreign Exchange, FTSE, GDP, Germany, Gilt, govvies, Greece, HUUUGE, IMF, Indicators, inflation, international, international norms, Kim, Korea, Labour, Lagarde, macro, macro-technical, manipulator, market, markets, May, missile, MOAB, norms, nuclear, redux, Republican, risk-off, risk-on, Russia, S&P 500, strike, Syria, T-note, technical, Trade, TREND, Trump, Turkey, UK, US dollar

2017/04/12 Commentary: More Diametric

April 12, 2017 Rohr-Blog Leave a comment

2017/04/12 Commentary: More Diametric

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Wednesday, April 12, 2017

More Diametric  

As opposed to last Tuesday’s Commentary: Dopier Diametric on the blatant reversals of US political leaders for no better reason than playing to their political base in the moment (like the Democrats on the Neil Gorsuch Supreme Court nomination), there are a couple of current reversals that seem a bit enlightened. Of course, foremost among those is US President Trumps’ switch from his ‘America First’ campaign promises to be more aggressively engaged in pressing geopolitical issues. And how ‘diametric’ that reversal is remains an interesting aspect for the markets as well as overall US policy. In what might be considered a bit of ‘double diametric’ elsewhere, the International Monetary Fund (IMF) has shifted back to demanding more Greek debt forgiveness from the European Union (EU) creditors prior to approving IMF involvement in the next round of Greek bailout funding. That may actually become a more pressing issue for the markets later this month into May, and we will review it further below.

Yet for now the US President’s actions are diametrically opposed to the ‘America First’ policy of ignoring the world and concentrating on US issues and rebuilding that he promised during the election campaign. Considering how much his campaign positions worried the rest of the developed world in the face of major geopolitical challenges means that, on balance, this is a positive development. And certainly any caring individual can easily relate to the immediate trigger for his decision to act decisively:

The alleged (still refuted by Russia and a few others) Syrian government poison gas attack on its own civilians in the rebel-held town of Khan Sheikhoun. This is another example of the power of social media, as people who were there could post videos taken with their smart phones of the horrifying images of those affected by the poison gas. These were truly disgusting and depressing images. They also seemed to verify that Syria had not completely ended its chemical warfare efforts after agreeing to do so in the wake of its attacks in 2012. It also seems to indicate that (as US officials and others have said) the Russian guarantors of that cessation of Syrian chemical weapons programs have either been complicit or incompetent in failing to enforce the chemical weapons ban.  

So while not an overall solution to the Middle East problems, the signal from the Trump administration is the USA may well once again act. Which is a very important change…

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged 2007, 2007 redux, adversaries, air, air strike, allies, analysis, bond, comments, confluence, Congress, currency, Democrat, economic, election, employment, equities, Euro, Europe, exports, fixed income, force, Foreign Exchange, FTSE, gas, GDP, Gilt, Gorsuch, govvies, IMF, Indicators, inflation, interest, interest rate, international, international norms, Iran, kinetic, Korea, macro, macro-technical, market, markets, norms, Obama, poison, potential, redux, reform, Republican, risk-off, risk-on, Russia, S&P 500, strike, structural, structural reform, Syria, T-note, technical, Trade, TREND, Trump, US dollar

2017/04/04 Commentary: Dopier Diametric

April 4, 2017 Rohr-Blog Leave a comment

2017/04/04 Commentary: Dopier Diametric

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Tuesday, April 4, 2017

Dopier Diametric  

As we noted early in last Tuesday’s Commentary: Hopes and Dopes, the political leaders we mention below must actually be fairly smart in order to get elected in the first place. The same goes for the supranational officials at the tops of their various organizations. Yet in so many cases their pursuit of a political agenda leaves them sounding like dopes to one degree or another. And as the title of this post indicates, in many instances this is distinctly linked to taking positions which are so diametrically opposite as to strain credulity…

…and in many cases that leads to diminishing the standing of the entire political class. As this is by no means rare, we have commented on these sorts of political volte faces more than few times in the past. Yet the latest round of major and extensive position reversals is striking in both its extremes and total philosophical reversals along with the shattering of precedent. While there is much to discuss on the current round of Republican Party foolishness, and especially the President’s ham fisted intra-party influence efforts, the Democrats are the poster children right now for inane and total position reversal as well as the specious claims of ‘unprecedented’ actions contemplated by Republicans.

We are referring of course to the confirmation process for Supreme Court nominee Neil Gorsuch, where the Democrats are threatening a filibuster. That is of course the process by which they endlessly speechify to prevent the nominee from being confirmed, effectively blocking Judge Gorsuch’s path to the Supreme Court. Or does it?

In this case the Democrats own recent efforts undermine their ability to effectively block Judge Gorsuch from ultimately being approved. Democratic Senate Minority Leader Schumer keeps alluding to how the Republicans invoking the ‘nuclear option’ of reducing the votes necessary for approval from 60 (i.e. necessary to close the filibuster) to just a simple majority of 51 would destroy the vaunted nature of the US Senate. Yet it was the now retired Democratic Senator Harry Reid who made a simple majority sufficient for federal judicial appointment approvals (other than the Supreme Court) in November 2013.

So Schumer decrying the ‘shattering’ of Senate precedent and its lofty position as the ‘upper house’ rings more than a bit hollow. And the full background gets so much better…

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged 2007, 2007 redux, analysis, Biden, bond, comments, confluence, Congress, Conservative, currency, debate, Democrat, economic, election, employment, equities, Euro, Europe, exports, fixed income, Foreign Exchange, FTSE, futile, Garland, GDP, gesture, Gilt, Gorsuch, govvies, Indicators, inflation, interest, interest rate, liberal, macro, macro-technical, market, markets, Obama, process, redux, reform, Republican, risk-off, risk-on, S&P 500, SCOTUS, structural, structural reform, stupid, T-note, technical, Trade, TREND, Trump, US dollar

2017/03/28 Commentary: Hopes and Dopes

March 28, 2017 Rohr-Blog Leave a comment

2017/03/28 Commentary: Hopes and Dopes

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Tuesday, March 28, 2017

Hopes and Dopes  

The old adage “hope springs eternal” seems to have been operating in the US equities of late. It is hard to explain how else the failure of last week’s late week Trump administration healthcare reform legislation failure left the US equities buoyant into Friday afternoon. While there was a seeming temporary comeuppance into Monday morning, that was short-lived. At present the June S&P 500 future is back up in the vicinity of previously failed support (now resistance) in the low-mid 2,350s. This is very much akin to the rallies back up into that area after last Tuesday morning’s failure below both 2,370 (still the more important higher resistance) and 2,350 areas. So after the dual healthcare reform legislation failure last Thursday and again on Friday (pulled in both cases once House Speaker Ryan knew he didn’t have the votes), how can this be?

“Hope springs eternal.” Yet this blind trust in the future also has a component of some folks just blindly believing that the Republicans will somehow prevail in spite of the logic of the situation not supporting their expectations… the ‘dopes’ referenced above. And so it is now in the Republican Party response to the failure of the healthcare reform, as they blithely state that they can just move on to major tax reform… as that will be ‘easier’. Really?! This is where we feel these folks who must actually be fairly smart in order to get elected are once again talking like a bunch of dopes.

We’ll get back to that in a moment. First there is the glaring issue of President Trump’s spokespeople asserting he really didn’t want to pursue healthcare reform first anyway. His priorities are more so tax reform and the major infrastructure investment America so badly needs (…failing bridges and all that.) Is it just us, or is this far too glaring an example of Aesop’s ancient fable about ‘The Fox and the Grapes’?

After many failed attempts and much effort to reach some grapes on a high vine, the fox rationalizes that they were probably not any good; from which we also get the phrase ‘sour grapes’. And this is much more than moving on to a next, unrelated legislative goal, as the healthcare reform failure has both general and specific implications for any tax reform effort. That is both for the President and the Republican Party…

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged 2007, 2007 redux, analysis, billion, bond, Caucus, comments, confluence, Congress, Conservative, currency, debate, Democrat, dopes, economic, election, employment, equities, Euro, Europe, exports, fixed income, Foreign Exchange, fox, Freedom, Freedom Caucus, FTSE, GDP, Gilt, govvies, grapes, healthcare, hope, hopes, Indicators, inflation, interest, interest rate, Legislative, macro, macro-technical, market, markets, moderate, process, redux, reform, Republican, risk-off, risk-on, Ryan, S&P 500, split, structural, structural reform, T-note, tax, tax reform, technical, Trade, TREND, trillion, Trump, US dollar

2017/03/24 Commentary: Healthcare Reform Rx

March 24, 2017 Rohr-Blog Leave a comment

2017/03/24 Commentary: Healthcare Reform Rx

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Friday, March 24, 2017

Healthcare Reform Rx

The question seems to be whether there is indeed any possible prescription for US healthcare reform after it was obvious the passage of the Trump-Ryan legislation lacked the necessary votes in the House of Representatives on Thursday. After many assertions by all of the Trump loyalists that there would be a successful passage of the House bill, the cancellation of that vote Thursday afternoon was a really shocking affair… or was it? There was good reason to believe the current House healthcare reform bill was in serious trouble, as we noted in our Thursday morning emailed note. Most important at present is to revisit the reasons the healthcare reform bill experienced de facto defeat yesterday, and why the equity markets and other asset classes are behaving so well is the rightful more immediate focus.

Dealing with the straightforward answer to the latter first, there is another vote on the exact same partial compromise scheduled for today. While in the same final form from yesterday there is no reason to believe its chances are any better, the markets have to allow that that there may be a constructive surprise. And regarding the market responses, here’s the ultimate cautionary word that is much the same as prior to the UK Brexit vote and November US election: this is an imponderable ‘binary’ decision.

That is because the House Republicans who control the agenda have indicated that next vote will be between 14:00 and 17:00 US Eastern Daylight Time. Yet a realistic view under the contentious situation (more below) on this particular iteration of healthcare reform means that the final negotiations are likely to be drawn out beyond that. And in any event, any vote taken after 15:00 EDT will be after the last of the markets (US equities) are Closed for the weekend. So it is an imponderable how the markets will react to either the initial success of the Trump reform program, or failure which casts a pall over all of it.

As it was apparent to us that the political dynamics within the Republican Party created a very fraught path for the House healthcare reform effort, we will first revisit and expand just a bit on that view from yesterday’s emailed note. The expansion will delve into the Republican Party split along moderate-conservative lines that explains quite a bit.

Authorized Subscribers click ‘Read more…’ (below) to access the balance of the discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. As this is a concise follow on analysis of the US equities activity and relative performance of other equities and asset classes, there is no Extended Trend Assessment in this post. Please refer back to last weekend's post for that.

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Rohr Market Research Tagged 2007, 2007 redux, analysis, black, black swan, bond, comments, confluence, Congress, conservatives, currency, debate, economic, election, employment, equities, Euro, Europe, exports, fixed income, Foreign Exchange, FTSE, GDP, Gilt, govvies, healthcare, Indicators, inflation, interest, interest rate, Legislative, macro, macro-technical, market, markets, moderates, omnibus, Order, process, redux, reform, Regular, Regular Order, risk-off, risk-on, Rx, S&P 500, sequester, structural, structural reform, swan, T-note, technical, Trade, TREND, Trump, US dollar, Vol, Volatility
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