Global Macro Trading Journal

Daal said:
http://www.zerohedge.com/news/2017-03-23/100-years-ago-russian-stocks-had-very-bad-day

Return in stocks in 1917 Russia: -100%
Bonds: -100% (it actually had some kind of recovery but only in 1989 according to Rogoff)
Savings account: almost -100% (only small accounts were sparred)
Real estate/land: -100%

If this doesn't prove the value of global diversification, nothing can
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If you were a local investor in Russia circa 1917 you almost certainly had bigger issues than your investment portfolio. You can think of equivalent scenarios elsewhere in the world over the last century - Jewish investors in Germany pre-WWII etc.

No matter how safe your investments are, you have to stay alive for them to matter. Maybe the lesson should be to have a run-for-the-hills fund that would allow you to make a quick escape in this kind of situation?
 
sle said:
If you were a local investor in Russia circa 1917 you almost certainly had bigger issues than your investment portfolio. You can think of equivalent scenarios elsewhere in the world over the last century - Jewish investors in Germany pre-WWII etc.

No matter how safe your investments are, you have to stay alive for them to matter. Maybe the lesson should be to have a run-for-the-hills fund that would allow you to make a quick escape in this kind of situation?
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You make a valid point. I lived in Malaysia when the Vietnamese boat people were landing. I forget which Prime Minister, maybe Mahathir, wanted to push them back to sea. It was even suggested shooting at them would be a deterrent. The ones who did best overall were the ones who landed with gold bars and jewellery. No matter the self-perceived decency, nothing works better than the appeal to greed. If you are in America and are able to, ask any Vietnamese who left on a boat.
 
justrading said:
You make a valid point. I lived in Malaysia when the Vietnamese boat people were landing. I forget which Prime Minister, maybe Mahathir, wanted to push them back to sea. It was even suggested shooting at them would be a deterrent. The ones who did best overall were the ones who landed with gold bars and jewellery. No matter the self-perceived decency, nothing works better than the appeal to greed. If you are in America and are able to, ask any Vietnamese who left on a boat.
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It would be an interesting back-of-the envelope actuarial study - what is the probability of a person getting caught in this kind of fin de monde scenario in his life time? E.g. look at all conflicts from 1900 and onwards (modern world only), look at civilian causalities as a percent of population and then adjust that by total population of the world (or maybe civilized world?). Something like that. I bet it's not a zero-probability event and might be something to prepare for, but nobody ever does.
 
sle said:
It would be an interesting back-of-the envelope actuarial study - what is the probability of a person getting caught in this kind of fin de monde scenario in his life time? E.g. look at all conflicts from 1900 and onwards (modern world only), look at civilian causalities as a percent of population and then adjust that by total population of the world (or maybe civilized world?). Something like that. I bet it's not a zero-probability event and might be something to prepare for, but nobody ever does.
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Well, to be fair Vietnam had years of conflict as warning. If I lived in America or Europe today, would I stock up on gold bars? No.

I live in Thailand. Given the completely irrational push by China on the 9 dash line, and the unwillingness of the international community to meekly accept that, I keep a keen eye on it

Either relocate or buy gold. Sooner needs no gold.
 
sle said:
If you were a local investor in Russia circa 1917 you almost certainly had bigger issues than your investment portfolio. You can think of equivalent scenarios elsewhere in the world over the last century - Jewish investors in Germany pre-WWII etc.

No matter how safe your investments are, you have to stay alive for them to matter. Maybe the lesson should be to have a run-for-the-hills fund that would allow you to make a quick escape in this kind of situation?
More...
Yes, perhaps cash in the matress or gold in the backyard. Also, have investments spread out geographically (I mean, the custody of the securities). I got brokers in the US and Brazil. Recently I asked one of my offshore banks to open another account (In CHF). If the US goes bust, I will have that going for me. Once I get rich enough I will probably keep some gold bars deposited in a bank vault somewhere stable, so no matter what happens I know I will have money to make a trading comeback or at least to live decently for a while. I also have dormant bank accounts in different continents, within a day or two I can have money wired to those places.
 
I do have a fair amount of US/USD risk. If I'm wrong on Trump and the guy goes nuts, I could get hurt. I spend a fair amount of time thinking about US fiscal crisis risk, to me that is a far bigger risk. A 70's UK style crisis or something worse. If the US goes into a fiscal crisis, this will probably be bigger than 2008. I mean, look at Brazil, part of what is holding up the country together is the $370B in USD reserves the country has deposited in NY. If the value of that goes suspect, so does Brazil's credit. So does dozens of other countries, plus a number of banks (US and non-US that own a lot of treasuries), so does commodity prices (taking down other countries with it), and on and on. Its such a nightmarish scenario that it pays to insure against

I started this process by opening an extra account outside the US denominated in CHF. Now I need an FX broker outside the US, so I can short the USD if a crisis hits. Shorting futures or USD inside the US is just asking to be hurt by capital controls.

I need to explore two things going forward
-To find out a really good non-US broker to keep some spare cash on. I want to find out what is the "IB" of Asia. I know IB has a HK branch but I'm not sure that would be good since they are connected with the US parent. I'm open to sugestions
-To run the numbers of the US fiscal situation and see how bad it is, how soon can one expect problems to occur. I know that Druckenmiller has done some work on this and it's not pretty. The numbers seem to run around $100T-$200T vs $20T GDP. And Congress seems to clear that they wont move a finger, until they have to
 
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Daal said:
I do have a fair amount of US/USD risk. If I'm wrong on Trump and the guy goes nuts, I could get hurt. I spend a fair amount of time thinking about US fiscal crisis risk, to me that is a far bigger risk. A 70's UK style crisis or something worse. If the US goes into a fiscal crisis, this will probably be bigger than 2008. I mean, look at Brazil, part of what is holding up the country together is the $370B in USD reserves the country has deposited in NY. If the value of that goes suspect, so does Brazil's credit. So does dozens of other countries, plus a number of banks (US and non-US that own a lot of treasuries), so does commodity prices (taking down other countries with it), and on and on. Its such a nightmarish scenario that it pays to insure against

I started this process by opening an extra account outside the US denominated in CHF. Now I need an FX broker outside the US, so I can short the USD if a crisis hits. Shorting futures or USD inside the US is just asking to be hurt by capital controls.

I need to explore two things going forward
-To find out a really good non-US broker to keep some spare cash on. I want to find out what is the "IB" of Asia. I know IB has a HK branch but I'm not sure that would be good since they are connected with the US parent
-To run the numbers of the US fiscal situation and see how bad it is, how soon can one expect problems to occur. I know that Druckenmiller has done some work on this and it's not pretty. The numbers seem to run around $100T-$200T vs $20T GDP. And Congress seems to clear that they wont move a needle, until they have to
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To my knowledge there isn't an IB here. Look for a prime broker.
 
justrading said:
To my knowledge there isn't an IB here. Look for a prime broker.
More...
I'm looking for an "IB" like broker in Asia, low commission, low fee, broad product universe type broker. They must also be friendly to non-Asian accounts. If anyone know, I would love to know one
 
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