Global Macro Trading Journal

[Daal]

You should backtest it and see how it performs...

I would if I needed the data but at this point I don't. Maybe 1% is not the magic number, could be 0.5% 0.75%, it has to be a number that occurs often. But I'm familiar with some very backtested short-term trading systems that plays reversals on SPY and the frequency of short-term positive edges on the instrument due sell-offs is quite a bit (the systems are from the quantifiable edges guy).

There has to be a way to implement some version of that idea into a dollar cost averaging strategy if you have monthly cash to deploy into the market

 

[Martinghoul]

I would if I needed the data but at this point I don't. Maybe 1% is not the magic number, could be 0.5% 0.75%, it has to be a number that occurs often. But I'm familiar with some very backtested short-term trading systems that plays reversals on SPY and the frequency of short-term positive edges on the instrument due sell-offs is quite a bit (the systems are from the quantifiable edges guy).

There has to be a way to implement some version of that idea into a dollar cost averaging strategy if you have monthly cash to deploy into the market

There is a lot of literature on these types of strategies... Sounds like it's a similar approach to "constant mix".

 

[Daal]

It's so annoying to see global media outlets coming out and saying 'there is little basis for impeachment in Brazil, Ms Rouseff needs to resign'. These journalists have little or no knowledge of legal matters and yet they feel comfortable with exposing their opinions to the world and a lot of the time giving ammunition to the goverment and their followers to try to continue with this myth that there is a coup going on

Brazil has an history of hyperinflation and debt default, a fiscal rule was created (Fiscal Responsability Law) in 2000, 6 years after the hyperinflation was ended, in order to stop these problems from happening in the future.

The highest fiscal court in Brazil has came out and said that Ms Rouseff administration committed fraud in 2014, violated that rule as well as articles of the Constitution. These violations make the executive liable of impeachment.

The ONLY debate is which executive should bear the burden of the punishement. Is it the finance minister or the president AND the finance minister? The recent judicial history in brazil is to punish the highest executive in fiscal matters at the municipal and state level because of the importance of these matters. Do you think these journalists are searching for municipal judicial decisions regarding fiscal matters in order to base their decisions? No, they are likely to be completely unaware of that.

So, as a result, they want a fiscal crime to go unpunished. Increasing the risk of inpunity and future fiscal problems

 

[Daal]

They think from the perspective of a 1st world country where inflation problems and fiscal problems aren't a big deal and this is just mainly an accounting issue

 

[Daal]

The last time the highest fiscal court rejected the federal goverment accounts was in 1937. They caught the government's books being cooked and that cooking has their part in the problems the country is going through right now

 

[Daal]

But its not just the global media outlets, its most people that commenting about the issue. Even brazilians. What I see on social media is just sad, a massive amount of confirmation biases. People who are from the left just look around for reasons to think everything is a conspiracy of the media/judicial bodies and politicians (even if the politicians are former members of the government's party), and completely ignore anything that proves there were crimes that a liable of impeachment (after all, they are trying to save the poor, the rule of law is secondary). People from the right look around for reasons to want the government to fall because they don't like their ideology, any reason will do. They happen to be right this time but their thinking is very biased and will make them wrong in the future about other things

Its sad to see things. People can get away with this in politics because there are very little punishment if you happen to be wrong. You can be wrong all your life and nothing major will happen (we never can know the alternative time lines that would happen if you thought and voted differently, especially at a macro level). In trading, you get punished pretty quick for being wrong. As a result, you learn to respect your ignorance. You tend to only give out your opinion (specially in a very public way) if you are sure you are right. Journalists tend to be held accountable for being wrong more but still, nowhere nearly as much as market operators. As a result, they come out and say what they think and don't care.

You see a lot of that with celebrities too. They try to influece public opinion without doing their homework about the issues involved

 

[Daal]

"The charge that is the basis for trying Ms Rousseff—that she manipulated accounts last year to make the fiscal deficit look smaller than it was—is so minor that just a handful of congressmen bothered to mention it in their ten-second tirades. If Ms Rousseff is ousted on a technicality, Mr Temer will struggle to be seen as a legitimate president by the large minority of Brazilians who still back Ms Rousseff." - The Economist

The techicality they are referring is the result of an interpretation of the Constitution that says the president can only be ousted for crimes committed in the current mandate. The prior mandate crimes would be forgotten in the first day of the reelection mandate. The consititution never said such thing, it was simply written before the reelection law was passed.

The supreme court never ruled about the issue. The law is clearly outdated and needs to be reinterpreted but that has not happened

Yet, its conviniently interpreted by some defenders as to mean first mandate crimes can not be part os an impeachment process. As if committing crimes in the last days of a mandate would exonerate the person from punishement a few days later

The supreme court has ruled that deputies can not run from punishement by using this defense. I don't think they would rule differently in the case of presidents

 

[Daal]

And if you consider first mandate crimes, then there are a lot of crimes. It wasnt just a technicality, it was a large fiscal fraud in an election year. As well as allegations of obstruction of justice and cover-up of corporate corruption

What these journalists don't seem to get is that Brazil had a president impeachment in the past (Collor) based on illegally collected evidence. The legal technicalities didn't matter, if you have a criminal in office, he needs to go. How the evidence was collected is the least of concerns. In the actual judicial trial, he actually won a few years later based on that defense (as he should have). But to want to keep in office someome who is a known criminal based on legal technicalities, seem absurd to me and to most of the country. So the consensus was that it was the right thing to do

An impeachment is mostly a political trial anyway. If justice was what the constitution was after, the trial would happen at the supreme court or, at the supreme court AND congress. But it only happens in congress. Where a president will have enemies, opponents, people with conflicts of interest, etc. There is no filtering process like a juri would have.
An impeachment by its very nature is one of the most unfair trials ever! Which means its mostly political and its very close to the confidence vote that is regularly used in Europe. The differences, in pratice, are minimal

 

[Daal]

Its funny, some criticize the impeachment process by saying that it has very little legal basis due lack of crimes from 2015 and on. This would hurt countries stability, rule of law and investor confidence. But they do that by interpreting the constitution in a way that only considers crimes from the 2nd mandate. They defend a system where the 31st of december before the end of a mandate is the national crime day. Would THAT help stability, the rule of law and bring investor confidence?

 

[Daal]

Took small profits on fed futures position. Only got a small position now. I don't like how the Fed is not signaling a hike for June