Börjesson
5.5K posts

Börjesson
@cborjesson
Investment Manager - Main focus on fixed income, FX and macro economics. Married - Three kids. Öisare. YNWA.
Stockholm Inscrit le Eylül 2011
1.4K Abonnements1.2K Abonnés

@TheTrueVanguard The rubber keys on my ZX Spectrum make me nostalgic.
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Mats fick hjärtstopp på arenan i Norrköping under matchen i går. Tack vare flera hjältar runt om honom på läktarna lever han i dag och kan njuta av allsvenska avancemanget. #Öis gp.se/sport/fotboll/…
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@KrisAndersson86 Det är så oändligt ledsamt. Underbara Jota!❤️❤️❤️
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Last week, we hosted a call for @ExanteData clients on the ongoing asset allocation shift and (very negative) implications for the dollar.
Here I am just posting the opening slides from the call, that illustrates that there is nothing normal about the current regime...
short THREAD
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@cullenroche I think time is a factor. Without any improvements in x months, support will drop.
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@aintbychanzz__ I think Henrik Larsson’s header vs. Bulgaria 2004 deserves to be high on the list!
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This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.
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Here is a rant about tariff/economics. I do not want to be political. But you cannot separate trade policy from economics, so there is that.
Capitalism has proven far superior to communism in generating wealth. State controlled economies tend to do very poorly. Look at North Korea vs South Korea or Poland versus Russia. It is like night and day. There is always the issue of how the pie is divided, but it helps to have a bigger pie...
Tariffs are sand in the wheels of capitalism. It will make it harder to produce efficiently, and allocate capital efficiently if you have to pay taxes at the border (we have known about this at least since Ricardo). And any private company paying extra tariffs now are feeling that pain (both the dollars lost and the extra admin burden). That should also be pretty clear.
This does not mean that tariffs or industrial policy cannot be warranted, in certain situations.
For example, it seems clear that supply chains that are crucial to your military cannot be outsourced (think steel, shipbuilding, drone manufacturing). Hence, the idea of national security tariffs can certainly be very logical. The economic cost is worth it for national security.
Another example is when trading partners are not actiing fairly. China is a clear example here. Major US companies are not allowed to operate in China, with Google / Aphabet a key example. One of the biggest US companies had to shut down its China operations in 2010. This should certainly be a factor in trade policy and trade policy, if there are asymmetries like that (How can TikTok operate freely in the US, if Google cannot operate in China, how is that fair?).
Then there is the currency angle. For many years, foreign central banks kept their currencies artificially weak, to protect their exports. China was again prominent in this trend, accumulating lots of reserves up to 2014 to avoid CNY appreciation. This can arguably be seen as a barrier to free trade, and something that should be taken into account when tariff rates and other trade policy measures are decided. But in recent years, we have not seen a lot of this behavior. The USD has been very strong in recent years, globally, and other countries have actually been trying to strengthen their own currencies (or at least avoid weakness), as we have seen in Japan (selling foreign currency reserves to support the Yen in recent years). Perhaps US trade policy should have been more aggressive on this in the period 2005-2015?
And then there is the uncertainty dimension. Businesses like to have certainty. They can plan and invest with confidence, if they know the environment they are dealing with. At this point, they do not know what they are dealing with. USMCA tariffs are on one day, off the other day. Reciprocal tariffs are now on, but maybe they will be off soon, based on negotiations and deals to come. Nobody really knows. The uncertainty will cause investment to drop (likely sharply) as businesses just mostly wait it out. This is not good for the US economy.
And then there is the issue of transparency. The reciprocal tariffs imposed this past week were based on a formula that really is just a function of the trade deficit between the US and the country in question. It is not clear what the trading partner can do to be 'fair'. They can reduce their tariffs to zero, and the trade deficit may still be there (if they sell something US consumers or producers really want, or perhaps they have a natural resource that is unique). Hence, the lack of transparency (linkage to actual 'unfairness') will make the negotiations hard, as the formula used is not directly linked to each country's tariff rates on US exports or other non-tariff barriers (but simply based on the trade deficit)
This post will probably be unpopular. But some of these issues are actually not that complicated. Hence, it should in theory be possible to generate some consensus on the most important aspects.
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