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meiroy

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Everything posted by meiroy

  1. OK, just to be clear, I am not a "Fed hater". I think the U.S. institutions are crucial and important, starting with those that support the rule of law. I just think there is certain economic thinking which is false and has proven itself to be false more than once, that's all. Economics is not an exact science, that's life. Shall I start quoting Buffett about inflation and how to deal with trade? :)
  2. Here's my own personal "data": 1. Fed members are human beings. 2. These people have incentives, political ideas, and biases. 3. Sometimes, their decisions are directly linked to political events, see Yellen's decision not to raise rates when she should have. 4. The Fed chairman has a significant influence on the other members. Either directly or by providing their view to the public in advance. The chairman's impact in the real world is far greater than just being one vote of several. Imagine, if you will, that before the previous vote, Powell would go on TV stating that there should be a pause. He would then start the meeting by declaring there should be a pause. You can bet that such actions would flip some votes. That's the way it works. "My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation," -- Yellen 5. They have shown time and time again they do not really understand how the economy works. They just play with the models they learned in school. 6. The natural state of the market is disequilibrium. This is something the Fed will never accept. Which is why they end up creating worse bubbles and recessions. And I'm saying this as someone who thinks the institutions, the institutional capital, is what makes America great.
  3. I also got some for the first time in a very long time. Not too much.
  4. Exactly. He's just saying to the Fed: don't break the economy like you did before. Personally, I went into this with plenty of cash, been buying, and will continue to buy, luckily I don't manage OPM (poor hedge fund managers, total bloodbath ...). Right. He's saying don't slow down the economy while I'm here. Let it break down bad for the next guy. I manage OPM. My clients are cool with everything that's going on. In fact I'm meeting one of my larger ones tomorrow. We're cooking dinner together. No anxiety about the meeting what so ever. I can't speak for how the hedgies are doing. They'll pretty full of crap. Maybe they're hiding under their desks pretending that the phone doesn't ring. You must have done a great job choosing your clients, good for you. Regarding dinner, you can never know, let him be the first one to take a bite, then wait 30 minutes to see what happens. Of course, if you watched Princess Bride... sometimes this does not work out so well. Early Merry Christmas and Happy Government Shutdown!
  5. Exactly. He's just saying to the Fed: don't break the economy like you did before. Personally, I went into this with plenty of cash, been buying, and will continue to buy, luckily I don't manage OPM (poor hedge fund managers, total bloodbath ...).
  6. https://www.bloomberg.com/news/articles/2018-12-20/dudley-says-fed-needed-financial-tightening-to-restrain-economy "“Their view is, the economy is growing at an above-trend pace, we already have a very tight labor market, we need to slow the economy,” Dudley said in a Bloomberg Television interview Thursday. “Somewhat tighter financial conditions aren’t really a bad thing. They’re probably a necessary thing for the Fed to achieve its objectives.”" What. The. Fuck. How is his inflation objective thingie going? Is he looking at the number and seeing it at 4% next year? We are living in an age of exponential innovation + a huge economy like China exporting its deflationary prices. Inflation is not going to go significantly up anytime soon. And what would happen if wages rise a bit, it's not like they have risen significantly for years. Hence Trump. Why slow down the economy NOW? it will break it and cause a recession. He should have done it before when they had the chance. "“If the stock market were to keep going down, and the economy starts to weaken, then the Fed will definitely take a pause.”" So, here, we can clearly see that he does consider the stock market as a factor. He is also willing to wait until something breaks and then do something about it. Hey, that's exactly what they did in 2005-2007. Worked great. (no, I'm not saying we'll get 2007 again.)
  7. Spekulatius, The stock market is connected to the real economy. That's why we, value investors, make money. When certain sectors, or what Druckenmiller calls the inner stock market are down significantly it says something about the economy. This can cause a feedback loop by itself negatively impacting it as well. It's also important to note that Druckenmiller is not just saying "the stock market drops so there will be a recession", we tend to focus on that here because we invest in stocks but that's just part of it. The Fed was wrong not to increase rates earlier when they had the chance and they are wrong again now. Same old, same old.
  8. Uncertainty caused by Trump has a negative impact on the markets, for sure. However, the Fed's actions can cause a real eventual recession if they continue with the same mindset, they caused recessions and bubbles before so it won't be the first time.
  9. I wonder how the market would react when Trump fires Powell. The reasoning: Trump is a mafia boss caring only about himself, for him the market going down = he is losing. Also means, his circle of supporters/enablers might finally ditch the boat. Mattis just quit, it would be nothing to fire Powell as well. Who's taking bets?
  10. 1. Druckenmiller is the real thing. One of the only guys in the word that has the systemic view to profit off macro. His record is solid. He DID NOT say there's going to be a recession tomorrow if they raise. He said, they should have raised earlier on, and they didn't, this caused distortions with outcomes that cannot be avoided completely. He is now warning about the current FED policy. He warned in 2005. Should he have waited till 2007? I would listen carefully again to everything he is saying in the interview, including all the little details such as unemployment and him might being wrong. 2. This is not about raising this one time. 3. Trump got it right by accident, because of his own incentives. Druckenmiller gets it right because he knows what he's talking about.
  11. Everything is fine as long as zee Fed does not increase on the next meeting or signals that they will not increase the following one. Otherwise, we're fucked. Enjoy. . I'm buying.
  12. What did you like about Kingkiller Chronicles? I hope I don't put anyone off with my harsh comment if it's any good... some peopel seem to love it. Funny you mention Dresden, that's how I got to the current list of WWII books as I was looking for some info on Youtube about the rebuilding of Germany after WWII and the impact on Dresden. There's plenty of footage in color, showing the aftermath; rows and rows of ruined buildings, people pushing carts as no gas is available, the wounded laying on the sides of the road. And it's all in silence; no booming guns, no thunders planes. Horrorifying.
  13. Guns, Germs and Steel was a good read. Makes you think about humans from a macro perspective. Sapiens was like that too. That's exactly what I was thinking about as I have previously read Sapiens; how would you compare the two? Regarding thinking about humanity/humans from the macro perspective, you also got that in science-fiction...
  14. Started KingKiller Chronicles due to the Amazon reviewes and dumped it after reading a tenth. It's absolute crap. Horribly written. Somehow I ended up with Guns, Germs and Steel (why tech/nations developed in certain parts of the world) which I have been meaning to read for awhile now and All the Light We Cannot See (WWII fiction).
  15. Yes, he's fantastic. He does have two strong biases, though: 1. he's 100% supply side, everything begins and ends with that. 2. he doesn't really get China's economy and its real impact on the U.S. economy. "In any event, it's possible, and likely, that good news on the global trade front could alter the bond market's expectations rather dramatically, resulting in a steeper yield curve and ultimately a stronger economy. " China/USA issues are not going to be resolved any time soon. Having said that, he does post clear data which is quite useful. I'm betting that if there's a real panic starting the Fed will not raise until things calm down, if not next time then the one that follows.
  16. So, I've read Ghost Brigade, it's a light-spinoff, an easy beach read. Pleasant enough. Forgot it about an hour later :) Then, went with Anansi Boys, which is not really a sequel to American Gods, but still worth a read. Quite enjoyable. Then, Monarch of The Glen, a short story which goes on about Shadow in Scotland. And last, The Ocean at the End of the Lane which is pretty darn good for a fantasy book. I would have enjoyed it tremendously as a kid. After that I could not keep reading any of Gaiman's other books, it seems I have overdosed and now in need of some hardcore sci-fi.
  17. Thanks, will add those to the list. Well, a while back I binged on The Expanse which is the best hardcore sci fi I've ever seen, really good. It's based on the series by James S. A. Corey which might be worth checking out.
  18. Surprisingly, I haven't read it before, something always kept me away from reading anything by Neil Gaiman. I'm hooked. American Gods is really well written, flowing albeit slightly tedious at time. Of course, not Lord of The Rings sort of tedious (which, somehow, I've managed to read three times). Highly recommended. Also, read this week Old Man's War by John Scalzi. Was enjoyable, like those movies you forget the following day; doesn't get close to American Gods but still is worth a read on a beach somewhere.
  19. Q: Why did the Fed leave interest rates so low for so long? A: Because sometimes the people that work at the Fed just suck, as history has shown many times. They are not as good at forecasting or understanding the economy as they think they are. It would not be the first time they fuck up the economy by messing with the interest rates. 'the natural state of the markets/economy is disequilibrium', this is something people working at the Fed are unlikely to accept so by trying to have things nice and flat and delaying the inevitable they end up causing a bigger mess.
  20. Not strange at all. The moment that they sell bonds, rates go up. It's just basic monetary economics. disagree. fede can only raise short term rates by fiat. to raise long term rates, they have to sell bonds. by only doing former they risk inverting yield curve. they should have done the latter first I'm sorry, they don't raise rates by fiat. They do it by altering the money supply. To increase money supply they buy bonds, to decrease it, they sell bonds. They make the announcement and then proceed to implement it. There's really nothing to disagree with. It's just how it's done. Otherwise the free market will tell the fed to shove it - metaphorically speaking. The market tells the Fed to shove it when it crashes significantly, and then the Fed will stop raising rates, at least for a while.
  21. The artificially, extremely low-interest rates for such a long time caused massive debts and money flow into EMs. So, this situation already exists and in order for it not to get worse, interest rates have to rise. The economy is fine, the market is doing good, that's the best time to do it. Of course, because they rise it messes up all those EMs and debts. Point is, the shit was created when they kept the interest rates too low for too long and now we have to deal with it.
  22. Is the insurance expensive? Does it include emergency evacuation etc.? I know that when expats, from any country, living abroad (e.g. a French expat in Vietnam) wanting to buy an international health insurance they are often introduced to two types: 1. global including the U.S.A 2. global excluding the U.S.A. That by itself shows just how bad the situation is with the health system.
  23. rukawa, Thank you for your detailed reply. I've beeen a few times to Singapore. The health care system, in practice, is actually mostly Government run and the government pays for many of the public health services, public hospitals and doctors. It plays a heavy role in keeping costs down and insurers have to compete within this cost frame. Either way Singapore is a very unique type of an economy, similar only to Hong Kong, perhaps. The U.S. has little to do with Singapore and cannot be Singapore even if it wanted to.
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