Official Shiny Things thread Episode V, The Empire Strikes Back

[DevilPlate]

Nice to see you back. I remember back in 2017 interacting with you here. How naive I was to worry about the markets then, if I had just stuck to my plan my networth would have been 50% higher. But no regrets, atleast I didn't screw up totally.

U need to find your blind faith inorder to hodl. (Just like individual religon....free thinker is also a religion lolol)

Mine is gold and SG condos

 

[BBCWatcher]

U need to find your blind faith inorder to hodl. (Just like individual religon....free thinker is also a religion lolol)
Mine is gold and SG condos

I think we can safely rule out 60% ABSD as a viable choice in this individual situation.

 

[Shiny Things]

Haven't been back in this forum for a while. Good to see that this thread is still alive and kicking.

Oh yeah, it's always good to see the thread chugging along! (Remember when we had to create a new thread every thousand posts? Those were the days.)

@Shiny Things what's your hot take on the global economic mess going on right now?

I only really have strongly-formed views on the market side, not the economic side... but the markets side is hella weird right now. Singaporean and global stocks are working well (compared to US stocks), and bonds are doing great in both absolute and relative terms, but it doesn't feel great, right?

Anyway: folks who are diversified have done better, and will continue to do better, than folks who are all-in on US-exposed stocks. The geezer at 1600 Pennsylvania Avenue can do a lot to ruin everyone's day, but if you're sensibly diversified he can't do too much to you.

 

[jinsatkilife]

Pls share your strongly formed views. Are spreads widening and stress underneath the market? The speed and magnitude suggest we can surpass COVID lvl of VIX; not forgetting impact of 0DTE on market structure

Fintwit pros have said don't buy equities. This time is different. Even Tom Lee said to pause BTFD

This is a seismic change in global trading world order since WW2. More importantly, what are you looking out for? For eg, Trump tariffs can only last 1 year before mid terms elections come around. An emergency means it can be reversed or overridden by Congress as time passes and thus not going to make business invest in US manufacturing

How will it end? Is this the end of US exceptionalism and turning into Lost Decade? The thing is even if you're invested in world equities, they are all down; just a matter of relative outperformance vs US

 

[Shiny Things]

Pls share your strongly formed views.

I mean, I know about as much as anyone else right now, and I don't want to say anything inflammatory, so the only thing I'll say:

This is a seismic change in global trading world order since WW2.

This is quite true. The bloke in 1600 Pennsylvania is being quite clear that tariffs are not a negotiating tactic, and that he sees them as a long-term thing; and that means that the US is going to buy less stuff for the foreseeable future.

There are a few beneficiaries, though:
* Consumers outside the USA: all that stuff that was being built for the US market has to go somewhere, so you can expect lower prices on tradable goods (electronics, consumer durables, cars, clothes, etc);
* Bond investors: a low-growth, low-interest-rate environment is fabulous for bond investors (c.f. Japan in the 90s, the USA post '08). This is why you want to own some bonds alongside your stocks!

 

[BBCWatcher]

There are a few beneficiaries, though:
* Consumers outside the USA: all that stuff that was being built for the US market has to go somewhere, so you can expect lower prices on tradable goods (electronics, consumer durables, cars, clothes, etc);

In round numbers American consumers represented about 20% of global consumer demand. That percentage will likely drop if these tariffs stick.

Although we won’t see less expensive cars in Singapore. The COEs will rise to soak up any discounts on the vehicles themselves. Good news for the government, though.

* Bond investors: a low-growth, low-interest-rate environment is fabulous for bond investors (c.f. Japan in the 90s, the USA post '08). This is why you want to own some bonds alongside your stocks!

I wonder about the credit markets in the countries facing high tariffs that export(ed) a lot to the U.S. Plus the U.S. itself. We’ve already had a slow rolling, mostly Chinese real estate debacle. And there are a lot of REITs that may see rental payments dry up.

The weirdly popular “Asia (ex-Japan) fairly craptacular bond fund” is not looking so brilliant at the moment.

Anyway, I hope credit markets keep operating smoothly.

 

[revhappy]

I mean, I know about as much as anyone else right now, and I don't want to say anything inflammatory, so the only thing I'll say:


This is quite true. The bloke in 1600 Pennsylvania is being quite clear that tariffs are not a negotiating tactic, and that he sees them as a long-term thing; and that means that the US is going to buy less stuff for the foreseeable future.

There are a few beneficiaries, though:
* Consumers outside the USA: all that stuff that was being built for the US market has to go somewhere, so you can expect lower prices on tradable goods (electronics, consumer durables, cars, clothes, etc);
* Bond investors: a low-growth, low-interest-rate environment is fabulous for bond investors (c.f. Japan in the 90s, the USA post '08). This is why you want to own some bonds alongside your stocks!

At the margin, countries that are dependent on exports are going to be losers and countries who were running trade deficits and have a huge consumption oriented economy, for example, India, the UK etc are going to be winners.

Oil is getting so cheap, commodities are getting cheap, so it is great news for importing countries.

Btw, did you notice the Aussie fell 4% on friday Unbelievable how a currency can fall that much in 1 day.

 

[Shiny Things]

I wonder about the credit markets in the countries facing high tariffs that export(ed) a lot to the U.S. Plus the U.S. itself.

US high-yield has already been blipping wider (which makes sense, it was unusually tight before, even when you take into account the ratings migration and duration compression of the index). I don't see a ton of stress in IG credit or ABS right now, but it's very difficult to predict what that's going to look like after the "reciprocal" tariffs kick in on April 9th.

The weirdly popular “Asia (ex-Japan) fairly craptacular bond fund” is not looking so brilliant at the moment.

Is that the one stuffed full of Chinese propco bonds, or the one stuffed full of Sri Lankan govvy bonds? It's honestly amazing* how many EM-local-market bond funds have managed to trip and fall on their faces.

*it's not really amazing, Sri Lanka was a re-run of the tequila crisis, we've seen this before. EM local-currency bonds are just uninvestible.

At the margin, countries that are dependent on exports are going to be losers and countries who were running trade deficits and have a huge consumption oriented economy, for example, India, the UK etc are going to be winners.

Yeah, this tracks. If anything, Australia should be the biggest beneficiary: they have a humongous trade deficit with the USA.

Btw, did you notice the Aussie fell 4% on friday Unbelievable how a currency can fall that much in 1 day.

I did!! I genuinely did a double-take when I looked at the AUD chart, it seemed like a dud print: the only time I've seen AUD do that before has been when some leveraged punter is getting abruptly stopped out (e.g. Citic Pacific in 2008). I'll bet some bodies float to the surface on Monday in AUD cash or options.

 

[BBCWatcher]

Is that the one stuffed full of Chinese propco bonds, or the one stuffed full of Sri Lankan govvy bonds? It's honestly amazing* how many EM-local-market bond funds have managed to trip and fall on their faces.
*it's not really amazing, Sri Lanka was a re-run of the tequila crisis, we've seen this before. EM local-currency bonds are just uninvestible.

I’m astonished how many retail investors buy Asian bond funds with their junky holdings. And how often they get socked with 1+% expense ratios and even hefty loads (sales charges).

 

[DevilPlate]

I tot Mar a Logo js a myth?
or maybe they are really trying to forced them (Japan for eg huge US treasuries holder) by increasing tariff?

https://www.morningstar.com/news/ma...accord-heres-how-the-currency-deal-would-work
Forcing creditors to agree on swoping to century non-tradeable bonds (zero coupon) is CRAZY

Basically ask creditors to pay for their debts

 

[singaporean11]

I tot Mar a Logo js a myth?
or maybe they are really trying to forced them (Japan for eg huge US treasuries holder) by increasing tariff?

https://www.morningstar.com/news/ma...accord-heres-how-the-currency-deal-would-work
Forcing creditors to agree on swoping to century non-tradeable bonds (zero coupon) is CRAZY

Basically ask creditors to pay for their debts

Ah, won't be surprised that some countries will agree to whatever US demanded, like Taiwan, Phillippines, etc?

 

[Shiny Things]

ST, since you dabble in FX, if the goal of this madness is to reach an accord with countries that has trade surplus with US to strengthen their currency against US, thereby weakening USD, [...]

I'm gonna stop you right there: there is no goal.

The administration is arguing multiple mutually exclusive goals for tariffs at the same time. Lutnick and Bessent are out there saying that these tariffs are a negotiating tool; while Trump and Miller are saying that the tariffs are not negotiable and aren't going anywhere.

It's not a dollar thing either. All other things being equal, tariffs strengthen a country's currency, because they buy fewer imports. (Yes, this is in tension with Trump's long-stated preference for a weaker dollar and lower rates.)

There's just no evidence that the administration has a goal for their tariff policy, other than "President Trump wants to impose humongous tariffs and then see what happens".

 

[highsulphur]

I'm gonna stop you right there: there is no goal.

The administration is arguing multiple mutually exclusive goals for tariffs at the same time. Lutnick and Bessent are out there saying that these tariffs are a negotiating tool; while Trump and Miller are saying that the tariffs are not negotiable and aren't going anywhere.

It's not a dollar thing either. All other things being equal, tariffs strengthen a country's currency, because they buy fewer imports. (Yes, this is in tension with Trump's long-stated preference for a weaker dollar and lower rates.)

There's just no evidence that the administration has a goal for their tariff policy, other than "President Trump wants to impose humongous tariffs and then see what happens".

 

[BBCWatcher]

I'm gonna stop you right there: there is no goal.

How about personal enrichment and aggrandizement?

 

[highsulphur]

How about personal enrichment and aggrandizement?

There is nothing to stop him and his cronies from shorting the markets while they destroy them through ridiculous policies

 

[DevilPlate]

There is nothing to stop him and his cronies from shorting the markets while they destroy them through ridiculous policies

U think too lowly of Trump liao

It is beyond monetary gains which make him dangerous and unpredictable.

Remember the gunshot incident?
He stood up and fist up....many other leaders would have js hide between their bodyguards.

 

[leoch037]

Hi ST, would like to know your recommendations of ETFs for the following markets

1. World
2. S&P500
3. China
4. India

 

[Nick67]

Any change in play on the way to deploy funds? Are you guys continuing the DCA method at your fixed intervals or gonna hold out a while more to see how this tariff thing plays out?

 

[BBCWatcher]

Any change in play on the way to deploy funds? Are you guys continuing the DCA method at your fixed intervals or gonna hold out a while more to see how this tariff thing plays out?

No changes for me FWIW.

The only unusual action is that I spoke with a couple U.S. residents I know and suggested they try to "front run" upcoming tariffs. That is, if there are non perishable goods they would ordinarily consume that would be affected by tariffs, and if they can stock up at good or great prices, do it.

 

[d5dude]

U think too lowly of Trump liao

Trump and Melania coin not low enough for you?

It is beyond monetary gains which make him dangerous and unpredictable.

Remember the gunshot incident?
He stood up and fist up....many other leaders would have js hide between their bodyguards.

He could be a grifter and a brave airhead, they are not mutually exclusive.