Dalal.Holdings

Zoom out

The dollar was near record highs almost neat parity with the Euro not too long ago. Relax

Leave Goofy alone

Well if you want to throw punches, you’d better be able to take them

It’s rather obvious that America (and its politicians and entities) is a much bigger punching bag on here and generally than Europe or other comparably sized places…

This is quite peculiar, John. The number of foreigners who talk about America in negative light far exceeds Americans talking about Europeans in negative light. I think you're being too reactive. Learn to be like us Americans and take the criticism in stride . We get constant criticism from the world no matter what we do Plus, some of us Americans are invested in Europe and hope for the best for the continent

When I invest in things with hair on them, I try to invest with my eyes wide open. You can see my skeptical posts in Citigroup (even while I owned it) as evidence. "The first principle is that you must not fool yourself and you are the easiest person to fool." Both Citigroup and European regulators have strong track-records that speak for themselves. Trust them at your own peril.

European stocks have done relatively well. On top of that, the Euro is up around 9% YTD vs USD (of course, USD was near record highs vs Euro). Funny enough, just last year, this was a headline from the WSJ: https://www.wsj.com/finance/stocks/invest-in-america-live-in-europea-mantra-some-just-cant-shake-00f164f5 Investors all around the world were buying up U.S. stocks, especially Mag 7. If you did the opposite: live, in America, invest in Europe (with the benefit of strong USD), you've done well so far. Of course, my fear is that Europeans (led by an army of useless bureaucrats and politicians) will somehow screw it up. I hope not, but we'll see

There is plenty of debate on the topic, but we know for a fact that China has devalued its currency in the past to boost its exporters. It is likely that they are stealthily doing the same now. A strong currency would be very disruptive to their economy as it stands. As they say "show me the incentives and I will show you the outcome". https://realeconomy.rsmus.com/the-new-mercantilism-tariffs-and-currency-manipulation-in-an-era-of-u-s-china-tension/

Foreign capital flows into China has also declined in recent years since the crackdown on Jack Ma and covid. This means the currency declined. Because China treats foreign capital so poorly (ie. Risk of asset seizure, onerous regulations, favoring state owned firms, etc), these flows have precipitously declined which is another factor that has driven the Yuan’s value down. China was supposed to open up and become a consumption oriented economy. These things would have driven the Yuan higher. But under Xi, this was not allowed to happen.

The historical analogue: the Plaza Accords in the 80s when the Yen was forced to appreciate against the dollar. It probably led to the popping of the Japanese bubble in the late 80s. The CCP views this as a catastrophic risk (a vassal of the U.S. like they view Japan as) and they’ve actively tried to avoid it. They want their currency to be weak so they remain an export powerhouse Chinese Media Warns of Japan's Plaza Accord Lessons https://www.bloomberg.com/news/articles/2018-08-17/chinese-media-warns-of-japan-s-painful-lessons-from-plaza-accord

The fact that they peg their currency tells you all you need to know. If it floated freely, it’s value relative to the dollar would be higher. Econ 101 says that trade imbalances are transient because over time the country with the trade surplus has its currency appreciate and the one with the deficit has its currency lose value. Since China maintains a peg, that equilibrium cannot be achieved.

China has long moved to keep its currency low in order to support its exporters. It’s the only way they can hit GDP targets because most of their economy is production driven, not consumption. If they become consumers, then that calculus changes.

If China’s consumption goes much higher, then the U.S. will have achieved a great strategic victory. It will create a large market to which the U.S. and others can export to, it should result in the CCP engaging in less currency manipulation/devaluation of the Yuan, and it should overall shrink the trade surplus China enjoys with ROW. But the problem is that folks have been waiting for the Chinese to begin consuming for a long time and now they face population growth and other issues that will be headwinds. It sounds like culturally the Chinese do not like to consume—instead they put their capital towards real estate investments largely within China which have largely soured…

https://www.ft.com/content/5e76d152-35f5-4b60-ba42-c0f638f39319 America isn't the only country worried about critical infrastructure getting into China's hands...

"Buy the Dip" is dead Say hello to "Sell the Rip"

If you want to put Kuppy's post in context: Private Consumption as % of GDP: USA: 69% Europe: 52% China: 39% If the USA enacts trade barriers and tries to brings its above number down, who will replace them and consume all those things that were meant for Americans? Will Europeans? They are already worried that China will be forced to dump their goods onto them...

A really amusing outcome of these Trump Tariffs is that the Europeans (and others) may be forced to implement their own Tariffs against China in response to dumping ... https://www.nytimes.com/2025/04/14/world/europe/europe-china-dumping-tariffs.html

It's not really that hard to understand. Now Europe will have to swallow all those Temu goods: https://www.nytimes.com/2025/04/14/world/europe/europe-china-dumping-tariffs.html

https://www.nytimes.com/2025/04/14/world/europe/europe-china-dumping-tariffs.html Amazing that EU is talking about removing tariffs on Chinese EVs in this environment... Serving up pro-China ads to Brussels suits. They know what they are doing...

France saying they need to resolve fishing rights before letting the UK share in Euro defense fund. Spain saying "count our climate spend as defense spend". And people wonder why no one has taken the Europeans seriously. Just constant bickering and dithering.

BYD will get to keep those fat margins from increased MSRP and reinvest in their own business (heavily subsidized & promoted by the State) and crush Euro competitors. I don't expect Brussels bureaucrats who learned "all Free Trade is good" in their schools and time at Davos to realize that. Hey, why stop there? Maybe Germany can also hire Chinese companies to build their defense apparatus too.

Is it a level playing field if the Chinese State is highly involved in subsidizing these EV makers from the steel to the batteries to the rare earths ? Sounds like naive free-trader logic China already crushed European automakers in the Chinese market (after stealing their IP), now European politicians will welcome them with open arms onto their own turf??? LMAO. Like letting the fox in the henhouse.

Staggering levels of stupidity. I’ll take the Trump admin over this nonsense any day.

Allowing BYD to flood into Europe even with some b.s. “minimum pricing” rule will be catastrophic for European industry. China provides massive subsidies from which its EV automakers rule. It is not fair or free trade when they export these things… The fact that EU politicians are even considering this shows you how asinine they truly are.