Charlie Munger attributes his investing success to simply “being rational”.
Archives of “September 2019” month
rssDefaults on sovereign debt are more common than they seem.
The Fed cutting rates would be positive for emerging markets, they said…
Morgan Stanley revise forecasts higher for yen, CHF
A note from MS late last week with a set of look ahead forecasts
The bank expects further strength of yen and Swiss, lower EM and commodity currencies
- USD index to remain supported
- risk and growth outlook likely to weaken further
- further trade tensions
- Fed less likely to turn more dovish
- risk of a global recession rising
Forecasts:
Q4 Q1 2020
USD/JPY 101 (from 102 previously) 100 (100)
EUR/USD 1.15 (from 1.16) 1.17 (1.18)
EUR/CHF 1.08 (1.17) 1.10 (1.18)
China state media on the US’ “utile trade war” – stop acting as a “school bully”
Xinhua News Agency the official state-run press agency of the People’s Republic of China urges Washington to start learning at least four lessons from their futile trade war with China
You can click the link here for the four lessons if you like, but in brief its not a conciliatory piece. Some snippets:
- China is an unbent nail in face of U.S. tactic of maximum pressure
- China’s determination to fight against the U.S. economic warmongering has only grown stronger
- their trade war is hurting the American people and businesses
- the United States should learn how to behave like a responsible global power and stop acting as a “school bully.”
Finishes with a dig at the guy with the little red hat:
- Only then can America become great again.
Argentina imposed currency controls over the weekend – restricts buying of USD
Banco Central de la República Argentina has restricted sellers of pesos, concerned on the rundown in reserves
Statement:
“Given various factors that impacted the evolution of the Argentine economy and the uncertainty in the financial markets, the executive branch needed to adopt a series of extraordinary measures aimed at ensuring the normal functioning of the economy, sustaining the level of activity and employment and protecting consumers”
- restricts buying more than $10,000 US per month, or making transfers exceeding that amount per month
- requires companies to sell their dollars from exports in the local market, not permitted to hold the dollars
On Friday the central bank announced banks need to seek prior authorization before distributing their earnings
Thought For A Day
US imposes new China tariffs, raising levies to pre-WWII level
The U.S. slapped fresh tariffs on Chinese goods on Sunday to bring the average to more than 20%, comparable with levels seen during the protectionist era preceding World War II.
At 12:01 a.m. EDT, the U.S. imposed additional tariffs of 15% on about $110 billion in imports from China, covering 3,243 items. Consumer goods account for about half — far more than the 20%-plus of the previous round last September, which included such products as furniture. China’s corresponding tariffs against U.S. products took effect at the same time.
U.S. President Donald Trump postponed tariffs on 555 items on the original list — including smartphones — until Dec. 15 to soften the impact on the year-end shopping season. More than 80% of American imports of these goods come from China, and finding alternative sources is difficult. Higher tariffs are likely to lead to price increases, which risk weighing on consumer spending and thus the broader economy.
Digital consumer devices such as smartwatches are among the largest import categories by value affected by Sunday’s tariffs. More than half of all apparel is taxed as well.
China is retaliating with additional duties of 5% to 10% on $75 billion in imports from the U.S. The first tranche covers 1,717 goods including soybeans and crude oil, while the second set being implemented Dec. 15 will cover 3,361 items including autos.
But all told, fewer than 1,800 of these items — only about 35%, including crude oil — are new additions. Most have already been hit by previous rounds of tit-for-tat tariffs.
Beijing has already imposed tariffs on about 70% of its imports from the U.S. by value, and after these rounds, the only items left untouched will be those that it would be disadvantageous to domestic industry to tax, such as large aircraft. Previous tariff rounds have already led to sharp declines in imports of affected goods, and further hikes are unlikely to have much of an effect.
With the September duties, the average American tariff on Chinese goods rises to slightly above 21%, up from about 3% before the trade war, according to Chad Bown of the Peterson Institute for International Economics. China’s average tariff on imports from the U.S. climbs to nearly 22%. (more…)
The Trade War Is Suddenly Getting Worse
These are his ‘Laws Absolute’:
1. Never Overtrade. To take an interest larger than
the capital justifies is to invite disaster. With such an
interest a fluctuation in the market unnerves the
operator, and his judgment becomes worthless.
2. Never “Double Up”; that is, never completely and
at once reverse a position. Being “long,” for instance,
do not “sell out” and go as much “short.” This may
occasionally succeed, but is very hazardous, for should
the market begin again to advance, the mind reverts
to its original opinion and the speculator “covers up”
and “goes long” again. Should this last change be
wrong, complete demoralization ensues. The change
in the original position should have been made moderately,
cautiously, thus keeping the judgment clear
and preserving the balance of the mind.
3. “Run Quickly,” or not at all; that is to say, act
promptly at the first approach of danger, but failing
to do this until others see the danger, hold on or close
out part of the “interest.”
4. Another rule is, when doubtful, reduce the amount
of the interest; for either the mind is not satisfied with
the position taken, or the interest is too large for
safety. One man told another that he could not sleep
on account of his position in the market; his friend
judiciously and laconically replied: “Sell down to a
sleeping point.”