Global Macro Trading Journal

For the US to "Cubanize" a country is no big deal. Makes little to no difference to the US economy. For that economy, its the end, the politician running it will face a recession, will lose reelection and will be remebered as the idiot who fought Trump, lost and ignored the advice of all his economists who were telling him to not go to war.
Trump has big leverage due the size of the US, you throw in some crazy talk and a tariff or two and every other country will be shitting their pants
 
Except China of course, they are also big, they are the ones who could fight Trump a bit and even call his bluff. But in a game of Chicken I think Trump would win
 
I quoted Wilbur Ross this morning but his quote goes longer than that. He roughly said "People talk about tariffs as a first thing. Tariffs are the last thing. ITS PART OF THE NEGOTIATION"

That and Trump protectionist speech yesterday is what prompted me to realize he aint backing down after the election as I expected. But thats part of the plan

I wouldn't want to be short volatility in his first 100 days in office. I might even buy it, perhaps short S&P500 or select sectors as a trade. I suspect they will try to buy leverage for the future right off the bat
 
They might even label China a currency manipulator right from the start. This is not a Great Moderation president, expect volatility. This is neopolitics (as least in the executive in the US). Its a new way to do things
 
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On an unrelated note, I recently came back from vacation on Cape Town, South Africa. The country is great and I found real estate pretty cheap there. I have no idea if this is true but it appears to me that english speaking countries are having pretty big bull markets in real estate globally (even countries like Kenya, I met someone who works in RE from there and the prices I was told were off the charts), SA is lagging there though so it presents a potential opportunity.
The english speaking countries are great for a lot of people because its attractive for expats, for people looking to do business (they will be more comfortable dealing with english written contracts, plus semi-Britsh common law), for a lot of companies looking to expand and most of the executives will be more familiar with english than with other languages. Unemployment is 26%+, there is a lot of potential for improvement in the future if they get the right people in power. Maybe I should look at their REITs
 
Trump is certainly stirring up the pot. He has spoken directly with the President of Taiwan, something that hasn't happened since ties were established in 1979.

Those guys get their knickers in a twist if someone even talks to the Dalai Lama, so this should get them going.

Not sure how long it will last, but his early message is he will do things on his own terms.

We live in interesting times, might be a bit of a wild ride at times. Just hope it doesn't get out of hand.
 
justrading said:
Trump is certainly stirring up the pot. He has spoken directly with the President of Taiwan, something that hasn't happened since ties were established in 1979.

Those guys get their knickers in a twist if someone even talks to the Dalai Lama, so this should get them going.

Not sure how long it will last, but his early message is he will do things on his own terms.

We live in interesting times, might be a bit of a wild ride at times. Just hope it doesn't get out of hand.
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Yes, foreign policy is also where he might try a lot of these negotiation tactics. Daring China on Taiwan is a start. Could this all get out of hand? It could but I doubt it, it wont get any worse than Nixon flying B12s loaded with nukes into the Soviet Union as a bluff.
 
If you think about it, the reason the US has been on the worse end of some negotiations is exactly because of the reason so many people are afraid of Trump. Risk aversion. They rather not antagonize China, they rather have some free trade deal than no deal, they rather not threaten Putin, etc etc. They want a Great Moderation type world where hard things are achieved without volatility. Problem is that in a negotiation, if the other side thinks you are afraid of volatility and crazy talk/actions, they know they have you.
That could work when there is low hanging fruit around but when there isn't it wont. Wasn't Obama manipulated by Boehner during all those debt ceilling talks? Republicans werent afraid to threaten a debt default, whereas Obama was. I recall that even Krugman was saying that Obama got the shorter stick in those deals
 
So I started listening to the Art of the Deal audiobook. Already in the first chapter he describes this

upload_2016-12-4_1-51-4.png


"Sometimes it pays to be a little wild". There is also this passage

upload_2016-12-4_1-52-42.png


It looks to me that a lot of Trump's personality characteristics/behaviors are there simply because he knows that they work. It helps him getting things done
 
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Trump described two situations where he followed the right play from a game theory point of view. He threated to increase the legal costs of the banker to show that following down his path was going to be lose-lose. The banker backed down and both sides won. He also sued in order to show that his companies weren't going to be pushed around, when you are getting sued all over the place, the threat of a counter-suit could be what gets other parties to not sue. Therefore it gelps to avoid lose-lose sitations

Yet the idiots will look at this situation and focus on the antics, the oddness of the behaviors. Point is, feel free to disagree that most of this are calculated moves based on game theory but IF that's what is going on, the people that are pissed at Trump will NEVER see it. It will just fly over their heads that any of this could be going on because they are too busy being pissed off
 
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