And that makes all the difference. What happens behind the doors is part of statecraft & diplomacy
However what happens in front of cameras is purely to show everyone who is the boss and who call the shots. Even though it is the situation today, this will ensure countries realise they cannot rely on US to always have their back. It is clear that big powers are not allies and they only focus on their own interests.
This meeting will send shockwaves to the world. And I think after 18 years , Russia has achieved itâs objectives. There wouldnât be unipolar world anymore and ironically enough US itself is helping to achieve this objective.
In February 2007, Putin stood in Munichâs Bayerischer Hof for 30 minutes and accused the United States of creating a unipolar world âin which there is one master, one sovereign.â He added, âat the end of the day this is pernicious.â
It wasnât really Putinâs excoriation of the United States for hypocrisy after its invasion of Iraq that was notable; this was pretty much mainstream German, French, and much American thinking. The real moment of revelation was his broader conclusion that the U.S.-led liberal order, a.k.a. the Free World, was of no interest or value to Russia
What I found interesting was that stock market actually reacted quite positively to what happened. Itâs quite puzzling for me
Me too, I think itâs a combo of good individual stock data, more clarity regarding the âdealâ and (keeping my usual positive stance on life) easing of tension. Itâs counterintuitive but you know how you can feel relaxed even if a big challenge is coming the moment you at least know what the challenge is? I think itâs some of that in the S&P500âs shooting up after that trainwreck of a meeting. Overall I feel the stockmarket is quite relaxed, doesnât feel as nervous as it did last year.
TBH they have realised for more than a month now but in typical EU style behaved like ostriches about it. And actually, long-term policy of the US has gradually but steadily shifted away from caring about Europe with the fall of the USSR. More and more old guard retiring/dying, the new guard donât have any real reason/connection to feel anything about Europe. In a basic psychological level their fathers and grandparents didnât fight in Europe, and they themselves saw the tail end of the Cold War but not the part where the USSR was credibly scary (the 80s was chest thumping, the USSR was essentially dead by the early 70s). The US started slowly but steadily shifting away from Europe even during Clintonâs time.
Of course we have many small or large fifth columnists in the EU, but I feel that the energy of this current period is going to be spent, eventually. After all, nothing lasts forever, plenty of human turds around the world will be flushed down historyâs toilet in the next 5-10 years. Canât wait.
February was a month that tested the resilience of trend-followers, with sharp reversals, fragmented market conditions, and shifting trends making it difficult to capture sustained moves. While our WMA strategies ultimately remained in positive territory for the year, performance was challenged across multiple asset classes as volatility surged and trends faded faster than they formed.
Some time ago @Bojack proposed to organize a Discord server for forum users to chat, but there was no interest. I also know that some local user communities have WhatsApp chats that are mostly used to organize meetups. I also see a reason that some topics of, ahem, less permanent interest are better to be discussed in a different format than this forum.
So, is there anyone interested in setting up an alternative platform for forum users to chat?
I already have one which is coming up to 8000 messages on the US election alone. If people are interested, I can grant access. But be warned it gets very heated!
I think it is good that we keep politics out of this forum. I know it is tempting to go into politics when talking about impact of investments, but I prefer to stick to the investment related themes only here - and the focus is what makes this forum great.
Itâs a paradox, how can one talk about the impact of policy changes on investments without getting into politics? I mean, itâs in the name isnât it? I appreciate our mods donât have an easy way out of this, baring the occasional troll, when posts remain civil, coherent and of reasonable effort.
An interesting point of view would be to bring back that every bit of new information is instantly priced in by the market. The market seems to be pricing in the circus of the last month or so very softly, while itâs not at all kind to TSLA, for example.
The problem about the market pricing in policies is that it is heavily affected by the beliefs of the participants in what future policies will be enacted and how. It then (partially) corrects as things happen.
I find discussing the political and geopolitical context very useful as it gives me some perspectives on what other peopleâs beliefs are and helps me question my assumptions more efficiently. I am appreciative of this board and of the mods for allowing that.
For example, if tariffs are proposed, we can talk about impact of proposed tariffs without going into whether it is a good or bad policy, or if Trump is right or wrong etc.
The problem is when people get into politics, they tend to get each other upset and then discussions get derailed from the subject at hand into political arguments instead.
It all sounds a bit outlandish (then again, so would have other recent events), although it would fit the agenda of the principal players - how to keep a reserve currency, but lower the debt burden, and the currencyâs value (to help balance trade) - so it may be progressed. Doesnât sound too promising to a foreignerâs portfolio with perhaps 60% in dollar-denominated assets -
[âŠ] But at least two of the presidentâs top economic advisers â Treasury Secretary Scott Bessent and Stephen Miran, Trumpâs nominee to be chairman of the Council of Economic Advisers â have hinted that it could help the administration achieve some of its ambitions, particularly regarding a reduction of the U.S. debt burden and revival of American manufacturing. Bessent has reportedly said he would push for âsome kind of global economic reordering,â according to the Wall Street Journal. [âŠ]
To accomplish the delicate balancing act of engineering a weaker dollar without driving up U.S. borrowing costs, Miran, in his paper, turned to an idea first proposed by Zoltan Pozsar, the former Credit Suisse markets guru, who published a paper about the Mar-a-Lago Accord back in June. As part of the deal, U.S. creditors would agree to swap U.S. bonds held by their central banks for 100-year nontradeable âcentury bonds.â Otherwise, Washington could threaten to push them out from under the U.S. security umbrella. These bonds wouldnât carry a coupon, but they could be redeemed at a slight premium once they mature. [âŠ] Miran also proposed charging âuser feesâ to foreign central banks that hold U.S. debt, essentially retaining a portion of the coupon payments typically paid out by the Treasury and easing the financial costs of borrowing.
Sounds pretty much like debt default without debt defaultâŠ
Thought about that, not sure - how much globalization is going to be rolled back through tariffs and counter-tariffs, with companies having to resort to domestic labour (at a price), or pay the tariffs?
First thereâs a lot of tech companies that arenât really impacted by tariffs (but might be impacted if digital service taxes get more common, that might happen regardless of USD devaluation anyway).
Then a lot of those global companies already have global supply chains, so if the tariff war is only US vs rest of the world, it probably doesnât matter (the iphone you buy in Europe isnât imported from the US, and likely never crosses the US border). For the US market, they might have to raise prices though (and/or relocate which would also raise domestic prices).
On the other hand the devaluation is successful, it might make some US export more attractive (but probably the US would need to build a domestic industrial base first, which isnât done overnight).
If US cannot pay its own debts and force countries to convert to long term zero coupon bonds, it would simply reduce the valuations of the US companies because all US investments be considered high risk. Not because they are suddenly high risk but because they are governed by a law which is unpredictable
I know company is not the same thing as country . But the markets move in sync. If trust in country drops the trust in companies also drop
But if its just about mistrust in the country and not in being in the market overall, then this would just mean that money from the US part of VT flows into the non-US part of VT, right? So in that scenario you would be net zero when holding a world ETF, negative when overweighing US and positive when underweighing US.
IMHO, most likely scenario: the FED will push rates low, buys US bonds and both the FED and the treasury department agree to simply cancel out those liabilities.
Basically a balance sheet reductionâŠ
Nobody would default, no entity is worse off than before in nominal terms.
Only effect the money supply remains at higher levels, i.e. higher long term price levels.
// also positive for equity makets: more liquidity and debt problem solved.
Even though Chinese stocks might have/had some value. Iâve stayed away as now Iâm concerned that given Trump presidencyâs aversion for supporting Ukraine, I wonder whether they will also walk back on support for Taiwan.
If I was in the Chinese position and looking to take over Taiwan, the next few years while Trump is in power might be a tempting window of opportunity to do this.
I guess this is when I really should be buying Chinese stocks though - at maximum fear?
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