Category: Macro Posts

Emerging-markets currencies just had their biggest weekly gain since February.With China opting out of trade talks with US slated for next week, this gain might be short lived.

Tech disruption is deflationary, BofAML says. The supply of robots, artificial intelligence and big data putting downward pressure on the price of labor, goods, services & capital. Aging Demographics and Excess Debt adding to the deflationary pressure.

Venezuela’s hyperinflationary horror is far from unprecedented: In Venezuela it took less than 19 days in Aug for the currency to lose half its value. In worst month of Hungary’s hyperinflation, it took just 15 hours. Calculating half-life of a currency

In case you missed it: Rating agency Scope has cut China credit outlook to negative citing significant public-sector deficits despite recent consolidation efforts and a growing public sector debt stock; and high levels of total non-financial sector debt.

‘The price offered by Chinese vendors is usually 40-50% lower compared to what local suppliers offer, which renders irrelevant the 20% purchase preference advantage stipulated for the latter under the Make in India scheme.’

Noor Mohammad writes  …..Suppliers, who have set up manufacturing facility under the Make in India programme, are entitled to 20% purchase preference in public procurement. That means they will be given contract provided the bid price differential is less than 20% and they are ready to match the offer of the lowest bidder, a foreign vendor.
But despite that, local suppliers are being outbid by Chinese vendors. The reason: price offered by Chinese vendors is usually 40-50% lower compared to what local suppliers offer, which renders irrelevant the 20% purchase preference advantage stipulated for the latter under the ‘Make in India’ scheme.

Plasser India, a manufacturer of track-laying and maintenance machines is operating in India since 1965. It already has one manufacturing unit in Haryana.
It decided to set up another manufacturing unit in Vadodara with investment of Rs 400 crore to benefit from sops available under the Make in India. The facility is expected to be operational by next March. However, it failed to match up to Chinese competition in two recent tenders.
Siegfried Fink, managing director of Plasser India, wants the government to introduce 50% mandatory localisation to level the playing field for companies that have set up manufacturing facilities here.

It was lure of this kind of demand that led companies like Plasser India into expanding their manufacturing capacity here. But now their optimism is fading fast as they see the reality.

https://thewire.in/economy/a-chinese-wrench-is-stopping-public-procurement-from-supporting-modis-make-in-india

48 Laws of Power is a riveting narrative on the politics of power from bestselling writer Robert Greene. The book focuses on three main aspects of power. The first is observing power in others, while the second thread involves gaining power for oneself. The third element the narrative concerns itself with is defending oneself from the power plays of others. Some critics have pointed to the fact that the book seemingly glorifies unethical ways of advancing oneself in the workplace, or in life. Even if readers do not intend to obtain power, however,

Greene’s book is effective in helping readers combat the abuses of power, and other ills, both in everyday life and in the workplace.
Greene’s book spans three thousand years, thus including the philosophical beliefs on power from Machiavelli, Sun Tzu, Carl Von Clausewitz, and others, such as Henry Kissinger and P.T. Barnum. Greene’s book is also a notable presence in the field of power politics in that it summarizes the philosophical bases at the heart of these great thinkers. After delving into the history of power, Greene then summarizes his findings by placing his knowledge into 48 laws that he claims are essential to understanding, obtaining and wielding power.
The book is written in an easy-to-understand format, with the 48 laws as readily understandable as they are brief. For example, Law 28 says “Enter Action with Boldness,” and is meant to underscore the value one should place in confidence as it relates to power. A seemingly problematic law like Law 15, which states: “Crush Your Enemy Totally,” can shed light on the necessity of self-preservation in power politics. Moreover, Law 1, “Never Outshine the Master,” ( most important law in today’s as people have become more INSECURE)can be viewed as a caution for prudence when conducting affairs. These examples highlight how Greene’s laws, though seemingly elementary in their brevity, can be both easily understood and applied to larger issues at work in power politics.
Some critics have also taken issue with the apparent ruthlessness of the laws, placing Greene in a similar role to Machiavelli with his realistic take on people and politics in Italy. As noted above, though a law like Law 15 might appear ruthless in its simple statement of “crushing one’s enemy totally,” the aim of these laws is to allow readers to not only think about the laws’ place in power politics but to apply them as necessary. This means that people who are seeking to understand bosses or coworkers can see in Law 15 how or why they are being treated a certain way. As such, these laws are powerful tools for observation and understanding. They provide the necessary steps for those seeking to understand power and why (or how) it is used for good and/or ill.
Even for those readers who may be seeking to gain power, Greene’s laws highlight how best to approach a myriad of situations. For the prudent reader, these laws can be “translated” to fit a given situation. For instance, when Greene pronounces Law 8 to be “Make Other People Come to You – Use Bait if Necessary,” while some might take issue with “tricking” or “deceiving” others, in luring them in, the law can be read otherwise. Readers can view this law as a challenge to make the “bait” as appealing as possible. If readers place themselves in the role of the bait, the law can be understood for the advice it gives: make oneself as appealing as possible so that others are attracted without reserve.
Though the 48 laws deal with the undeniable way one can dominate a political situation completely with the right tools, Greene’s assessment of power over the course of the centuries also sheds an interesting light on relationships, morality, truth and love. The laws bear witness to what man has achieved or attempted to achieve over the centuries, and how these attempts and successes often stem from the knowledge, or lack thereof, of how to effectively wield power.

Regardless of one’s intentions, 48 Laws of Power is a delightful, insightful read

https://www.tke.org/files/file/The_48_Laws_of_Power.pdf

BOFA does a survey of Fund managers and the following graph should not come as a surprise to investors. Every asset ( EM equities, EM bonds, Commodities) has been sold to buy US equities.

Now that rotation is also almost over.

If dollar index continues to strengthen and DXY break out above 96 levels then US long bond will be the next big beneficiary ,but if US dollar breaks down over here get ready to see fireworks in commodities in general ( they have never been this cheap in last 20 years compared to equities).