Global Macro Trading Journal

http://www.wsj.com/articles/is-america-facing-a-police-crisis-1469828089

Interesting article. This is one of the reasons I wouldn't consider living in the US. Law enforcement there is just too agressive. When you combine that with the huge criminal sentences, the US is one of the countries where you are taking the most tail risk of being in prison for a really long-time, even if you are innocent (the strategies described in the article to extract false confessions are just disturbing).

But even if you are not innocent, and you screwed up, the sentences and the use of Juris are a scary combination. OJ Simpson was a POS but he would be out on the street now if it werent for the fact that he said 'doen't let anyone leave the room' when he was robbing that Hotel in 2008. That enabled prosecutors to go after him with kidnapping charges. He got 15 to 33 years. Thats just fucking ridiculous, anyone who invades a house to steal wont let the person leave the place they are. If he is a kidnapper then any buglar it is too. Truth is, the Jury was out to punish him for the fact that he got away with murder in 94. So as a result, they got him for kidnapping when it wasn't real kidnapping. The fact that Juris can do this with huge sentences involved, is a frightening thing.
 
In Brazil, you rarely go to prison before having exhausted all the appeals. There are 3 or 4 levels of appeals available (in addition to your first trial). Juris are rarely used, so as a result, you will have a number of judges (the appeals usually involve a panel of judges) reviewing your case before you ever set foot in a prison. I trust a lot of judges a lot more than regular folks. Not that Brazil is an example for the world, its just a different system where there will be more criminals on the street but there will also be less innocent people in prison. Specially, if you can afford a lawyer. If you can do that, the chances of you being put away are minimal. When you combine with the lighter sentences, even if somehow they convict you (and you are innocent), if thats your first sentence and you behave in prison, you will be out in a few years.

This does raise criminality on the streets but that problem can be solved by living in a good neighborhood (where criminality is low like in the US/Europe) and being smart. If you get sentenced for 30 years or life in prison in the US, there is no getting around that one
 
US citizens can still do some things so I would encourage anyone who lives there to watch this video. You could save you from huge trouble

It applies to almost any country but this seems to be specially important in semi Police states
 
That 94 crime bill and 9/11 seem to have sent the US down to a dark path in law enforcement and surveillance. Now with these anti-cop prostests, wikileaks, Snowden, etc people seem to have reached their limit of how much they will take. Thats a good thing. Maybe they will reverse that trend
 
A good tool to supplement an investor reading list is Google Now recommended articles. I have been impressed by the articles they suggest to me. Usually things that I'm interested in but normally would never find (because they are from sites I dont visit). Maybe thats because I use chrome and google knows everything about me. But I added a run down Google Now articles every morning now
 
I decided to calculate my exposures after this 'run on everything' that this market has had so I can have an idea of where I stand
As of now I'm in

17.2% BR USD bond 2024
11.2% EWZ
10.7% PSH fund
10% GLD
5.9% 15y UST
4.2% 30y UST
3.8% OAK stock
3% BR REITs
2% BRKB
1.8% EWZS
1.4% CNX bond
0.65% VRX
0.5% FMCC
rest is cash

This adds up to 34% in what I would consider risk assets. I'm not considering BR USD bonds really risk assets because of some factors, both related to the country and also related to my personal situation. My income is in USD, if Brazil were ever to default in this, I would make so much in the exchange rate that whatever loss I would have would be largely offset.
20% is in what I would consider hedges (GLD and US bonds)
The rest is in cash and low risk bonds (like those BR bonds). There are additional exposures in options. I'm short some BRKB puts and a fair amount of EWZ puts

I'm short those EWZ puts because I'm getting 'squeezed' right now due to the fact that I dont own my real estate and I'm trying to buy more BR REITs to cover that natural 'short' but due tax laws I can only bring so much money back to the country without triggering a big tax bill. So im trying to offset the fact that I will have to pay more in the future (as I continue to believe brazilian assets will continue to go higher) by taking more bullish positions now. I choose to short puts instead of more outright longs because I hate to pay up in runaway markets
 
The EWZ put trade, I'm counting on a correlation between EWZ and the REITs. Its probably not that high of a correlation but it should be significant enough that if EWZ were to fall off a cliff, the REITs would as well. Which would enable me to buy my housing assets (and pay my rent off their monthly dividends) cheaply
 
There are some bullish scenarios where Brazilian stocks will make a new all time high within 2 years. The reason has to do with its historical tendecy to having big economic rebounds in every recession it has had over the last 100 years. If the economy pulls that off, profit margins will expand and all of the sudden the market will still look very cheap
 
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