The trade wars, they have begun

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Re: The trade wars, they have begun

Post by admin » Mon Aug 13, 2018 5:40 pm

Sure looks like south africa is next on the EM hit list, but i would not doubt the bond / fx vultures take a swipe at brazil because of the election.

Funny, regarding the wall street random hits of the day, i am now hearing a new narative where they are throwing out colombia in passing (along side turkey, argentina), rather than chile, to test if it will stick.

Colombia might be in a more shaky position than chile economicaly, but everything i have seen it is doing just fine. Ending 50 years of conflict tends to leave an economy only one direction to go: up.
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Re: The trade wars, they have begun

Post by admin » Tue Aug 14, 2018 12:51 pm

Yep, a flood of articles starting to call for colombia to be next. Bloomberg is throwing it in with new "fragil five".

Same pattern as with the shots taken at chile.

A week ago or more, can not recall anyone mentioning colombia as being particularly any more vulerniable than most of the rest of latin american country. Suddendly, now it is in danger? No one was watching? There were no red flags? Yea their debt to gdp is high, but not eye popping relative to the EM space.

South africa i can buy, because they have been in a self-inflicted political death spiral for a while.
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Re: The trade wars, they have begun

Post by admin » Tue Aug 14, 2018 1:40 pm

The one thing that keeps me think this is not IT, is all the financial charts in stocks, bods, fx, indexez, etc, still have not dropped back to those 2015 levels. Basically when china paniced the markets by devaluing the RMB, and not communicating it properly.

This may not be IT, but IT is coming. November u.s. elections, trade war, two more fed hikes, etc. Lots of grey swans to work with on the horizon, to beat up on the EM markets. Sooner or later some of those grey swans will go home to the developed economies to roost.

I like a line i seen the other day in an article.

Bears are very sneaky predators. Their prey never see them coming.
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Re: The trade wars, they have begun

Post by frozen-north » Tue Aug 14, 2018 1:56 pm

admin wrote:
I like a line i seen the other day in an article.

Bears are very sneaky predators. Their prey never see them coming.
May be that reporter should learn more about bears.
Most bears are opportunistic omnivores and consume more plant than animal matter. They eat anything from leaves, roots, and berries to insects,

https://en.wikipedia.org/wiki/Bear

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Re: The trade wars, they have begun

Post by admin » Tue Aug 14, 2018 4:51 pm

Look at this chart, from an article on seeking alpha from 6 days ago:
saupload_180802-LatAm_Debt-01-1.png
Colombia is not even the most dollar debt heavy, in latin america, let alone the world.

So some how colombia became part of the fragile five in 6 days since that was published?

Yet, i have all day long heard talking heads claim colombia is the next turkey; but, with no data or arguement to back it up. They just keep repeating it. As if they repeat it sufficently, it will become true.

I am also seeing a few poking at chile, but they seem to mostly be cl8ck bait articles now parroting earlier published articles.
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Re: The trade wars, they have begun

Post by admin » Tue Aug 14, 2018 4:57 pm

Why is peru not part of the fragile 5 then?

Probably because Goldman Sucks, jp moron, and moron stanly have big positions in peru's mining sector.

My point is, watch out for wall street in latin america. They do stock and bond manipulation in the emerging markets all the time. It would be criminal if they did it to a company in the u.s. so blatently under SEC rules, but in the emerging markets they get away with it.

By the way goldman Sucks, was top earner of commisions for latin american securities last month.
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Re: The trade wars, they have begun

Post by admin » Tue Aug 14, 2018 5:45 pm

Meanwhile, argentina jacks rates to 45%, burns half a billion dollars from the IMF, the argentino pesos barrelly budges from its all time high of almost 30 pesos (like wopping 0.25 pesos) to the dollar, and all the talking heads come running now hailing that all is well again argentina.

That probably cost the argentina economy $10 billion+ in future gdp for that 0.25 move, that will last perhaps a couple of weeks at most. Probably more like the rest of the week.

But somehow, the story about china closing all the p2p lenders, estimated to default on over 250 billion dollars of debt, plus burning retail investors, hardly made the radar screen of any news organization.
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Re: The trade wars, they have begun

Post by admin » Wed Aug 15, 2018 11:59 am

Here, found another attempt to drop chile's name in to EM panic artcles. This one seems to come from douche bank:
Total foreign currency-denominated debt also amounts to over 50% of GDP in Argentina, Hungary, Poland and Chile, according to the Wall Street Journal, citing Deutsche Bank.
From everything i have read over the last 5 to 10 years, douche bank needs to worry more about their own debt to gdp ratio.
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Re: The trade wars, they have begun

Post by HybridAmbassador » Wed Aug 15, 2018 4:29 pm

Yep, but China is breaking one of numerous piggy bank and unleashing more than $450 billion Dollars into its internal economy for re-invigoration.That sum is almost the entire yearly GDP of Chile for god's sake!
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Re: The trade wars, they have begun

Post by admin » Sat Aug 18, 2018 11:03 am

In 4 days, we enter the longest u.s. bull market in history.

https://www.zerohedge.com/news/2018-08- ... ppens-then

The bigger they are, the harder they fall.

Brace for impact!!!
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Re: The trade wars, they have begun

Post by admin » Sun Aug 19, 2018 9:16 am

So i wanted some hard numbers to counter the b.s. i see in the the internatiinal press.

how much bullshit are they pushing in the international financial media about chile?

Well try this summary from the central bank of chile's H2 2018 financial stability report (good read, if your in to that kind of thing):
At year-end 2017, the gross debt of the central government was 24% of GDP,
an increase of 3pp in the last year (figure II.16). The net debt also increased, to
4.4% of GDP. The growth of gross debt was largely explained by local debt, which
reached US$56 billion (versus US$43 billion a year earlier). The majority of the debt
is denominated in local currency (45% in UF and 37% in pesos). In foreign currency,
the main denominations are dollars (10%) and euros (7%). With regard to maturity,
25% of total debt comes due in less than four years, 31% in five to nine years, and
the remaining 44% in over 10 years.
You can read the full repprt in english here:
http://www.bcentral.cl/en/web/central-b ... 18-summary

I am still working through it.

So, of concern would be the debt in foreign currency, and possibly UF (as it is based on inflation index that depends to a on foreign costs of imported goods for about 50% of the index). 44%, is of the 10 year type. So we are left with less than 50% of the debt in some sort of concern, if there was an international em crisis / global recession / fed tighting cycle. That is rounding error in most country's gdp. Hell, that was probably bill gates or jeff bezos tip for their lunch.

Hardly the debt crisis that they are trying to use to lump chile in with the fragil five.

Corporate debt was at 110% of gdp. High compared to em markets, but not when compared to typical debt profiles of companies in the early stage developed country profiles. Further, special to chile's situation, is a lot of that debt was taken in chile and invested in buying assets, mergers, and expansions in other economies, including developed markets. For example, BCI bank bought a u.s. bank. Copec bought u.s. gas station chain.

The big companies in chile, went transnational in a way never done before in history. They used the cheap credit at home, to buy assets in the neighborhood and around the world. I have not seen any waisting money on doing share buy backs or other b.s. finanicial white washing.

Even further, there has been a major shift in financing in the last year or so of publicly traded companies. They are dialing back bond offerings and loans, in anticpation of higher interest rates, and financing aquisitions with stock offerings and other none-debt financing. Sucks as a shareholder to be diluted, but i dont mind as long as the money is being put to good use and long-term debt is being reduced.
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Re: The trade wars, they have begun

Post by admin » Mon Aug 20, 2018 9:37 am

5.3% growth in the first trimester, investment up a solid 7%

https://www.latercera.com/pulso/noticia ... 12/287715/
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