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FX : the forgotten risk, reverse of the 1998 Asian crisis looms, USDTWD, HKD / Global realignment / FOMC tom

  • Writer: Stéphan
    Stéphan
  • May 6
  • 4 min read

ree

  • Markets : Berkshire top as Warren leaves, PLTR's crazy valuations (know what your are buying..), GOLD (up 3-5pct in 2days) is 'sniffing out' something that hasn't surfaced on mainstream markets (or reacting to a possible USD realignement?, TWD, HKD, who's next ?).., Equity markets have had a great rally since latre April, beware! reduce risk looks very wise...if not time for a hedging trade again...looks very reasonable IMHO !

  • Taiwan dollar rally : a sign of global realignment, HKMA spent record amount of USD to keep HKD within the peg, GOLD move, which USD pair is next ? watch out for cracks appearing is some places, FX has been a forgotten risk out there, for years PF and others have been accumulating USD and remained unhedged..liquidity will never be there when they want to hedge , bring money home/rapatriation now after years of accumulating, when the dam breaks, beware of binary events is various places and dysfunctional markets in some parts going forward ..>>> a REVERSE of 1998 Asian crisis, a higher CNH would be a huge tell !

  • The NY Fed's measure of inflation persistence (the "multivariate core trend" rate) stood at 3% in March/Thread

  • The Tariff bomb detonates this week / Thread

  • #PLTR : if i read the earnings report correctly..it grows now slower than most average tech company, and it is priced at 25x higher than the average tech Co.. hummm

  • Canada and the European Union agree to deepen free trade ties and economic cooperation

  • Xi Jinping to visit Russia on May 7–10 for WWII Victory Anniversary celebrations

  • Buffet: “The opportunity to deploy cash will come in the next 5 years”

  • Basel III, in July : Gold becomes a Tier One asset for western central bank

  • Saudi Arabia reports first-quarter deficit of US$15.65 billion. Declining oil prices and voluntary production cuts have weighed on Saudi revenue in recent years

  • “We are now going from a predictable trade regime to what is going to be a new equilibrium,” IMF Managing Director Kristalina Georgieva said. “The way from here to there, very uncertain.”

  • US, Canadian farmers face soaring fertilizer prices amid Trump trade war

  • The delinquency rate on US commercial mortgage-backed securities (CMBS) for offices SURGED to 10.3% in April, near the highest EVER



>>> possibly the start of something big, remember FX risk has been all but forgotten for years, big picture PF and others have been accumulating USD for a long time, and keeping most of them, often unhedged... this could start to hurt, as Bessent and Co keep pushing with tariffs (and again don't forget 'fx manipulation' has been mentioned in ALL tariffs chatters, it IS clearly included, various foreign countries will need to accept some form of currency appreciation...


Slow growth and crazy valuations...25x higher than your average tech stock..




Milken Crowd Warms Up to Tariffs While Condemning All the Chaos - Scott Bessent walked on stage at the largest gathering in months of Wall Street’s champions of global trade, aiming to explain why President Donald Trump is putting up hurdles to global trade. Fingertips steepled, his eyes panning, the Treasury secretary told a quiet crowd that tariffs, tax cuts and deregulation are “interlocking parts of an engine” to boost America’s clout — emphasizing it’s all thoughtfully designed. He soon paused: “I hope you can see the bigger picture now.” The verdict came swiftly: Investing titans and financial leaders at the Milken Institute Global Conference in Beverly Hills lined up to say they can live with tariffs and a reworking of trade — just get it settled soon 







Over the weekend,  the neoconservative David Brooks wrote this in an OpEd in the NY Times, "Trumpism… is primarily about the acquisition of power — power for its own sake. It is a multifront assault to make the earth a playground for ruthless men, so of course any institutions that might restrain power must be weakened or destroyed. Trumpism is about ego, appetite and acquisitiveness and is driven by a primal aversion to the higher elements of the human spirit — learning, compassion, scientific wonder, the pursuit of justice. … What is happening now is not normal politics. We’re seeing an assault on the fundamental institutions of our civic life, things we should all swear loyalty to — Democrat, independent or Republican. It’s time for a comprehensive national civic uprising. It’s time for Americans in universities, law, business, nonprofits and the scientific community, and civil servants and beyond to form one coordinated mass movement. Trump is about power. The only way he’s going to be stopped is if he’s confronted by some movement that possesses rival power. … I’m really not a movement guy. I don’t naturally march in demonstrations or attend rallies that I’m not covering as a journalist. But this is what America needs right now."



 
 
 

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