Love the point on relative country risk. If the US political system was previously not well understood and now the world has had its epiphany, fine, price that in, but do the same analysis on all the other western (+Japan) political systems and make sure you've priced those risks as well. System volatility will shock all systems. The relative story is always in play. Misunderstanding the US does not equal US system being inferior to its peers. The institutional stability illusion is broadly distributed across the West.
Trump may raise the volatility of the US (and consequently global) environment. But the suppression of that volatility in places like Europe, where they have tried to exclude parties they disdain from the democratic process, only increases the true risk of the system, i.e. a sharp change in policy direction in those jurisdictions. As one of the best observers of Japan, do you see similar risks there, @MarkFarrington?
Yes, loved that report. Volatility suppression is a good general framework to apply for analysis on policy & political systems. Post-GFC, this seems to have emerged as the MO for liberal democracies in order to match the PRC's total control over society. While the intentions may have been good, the suppression has fostered a dangerous (free) societal illusion.
In the case of Japan, it has used single-party rule to foster the illusion of stability & continuity, suppressing the needed infusion of leadership boldness and creativity (Koizumi & Abe the only exceptions over the past 4 decades). The younger generation is bringing philosophical change to politics, let's see who succeeds first. On policy, you see government subsidies still being used to cap headline inflation long after COVID, when it became normalised by Japan's peers. The BoJ holding rates artificially low in order to minimise debt servicing burden, allowing its currency to weaken to historical levels, an extremely dangerous suppression.
Japan uses FEFTA and stringent regulation to minimise foreign ownership, suppressing a much needed injection of dynamism to the economy.
These are long term issues, but for the markets, the BoJ/Yen/JGB dilemma is something to begin position for now.
Bilal’s voice is one of optimism and inspiration during a time in history when Im not hearing it from very many other sources. His enthusiasm about President Trump and the admiration he expressed when he called Trump a modern-day Andrew Jackson was a breath of fresh air.
Good talk. I've been Marvin curious and am pleased with the biographical "how I ended up in this seat with you" opening as well as the current events chat.
Love the point on relative country risk. If the US political system was previously not well understood and now the world has had its epiphany, fine, price that in, but do the same analysis on all the other western (+Japan) political systems and make sure you've priced those risks as well. System volatility will shock all systems. The relative story is always in play. Misunderstanding the US does not equal US system being inferior to its peers. The institutional stability illusion is broadly distributed across the West.
Excellent point, @MarkFarrington. Indeed that was part of the undertone of my prior piece at Seriously, Marvin?!: https://seriouslymarvin.substack.com/p/fire-marshall-trump
Trump may raise the volatility of the US (and consequently global) environment. But the suppression of that volatility in places like Europe, where they have tried to exclude parties they disdain from the democratic process, only increases the true risk of the system, i.e. a sharp change in policy direction in those jurisdictions. As one of the best observers of Japan, do you see similar risks there, @MarkFarrington?
Yes, loved that report. Volatility suppression is a good general framework to apply for analysis on policy & political systems. Post-GFC, this seems to have emerged as the MO for liberal democracies in order to match the PRC's total control over society. While the intentions may have been good, the suppression has fostered a dangerous (free) societal illusion.
In the case of Japan, it has used single-party rule to foster the illusion of stability & continuity, suppressing the needed infusion of leadership boldness and creativity (Koizumi & Abe the only exceptions over the past 4 decades). The younger generation is bringing philosophical change to politics, let's see who succeeds first. On policy, you see government subsidies still being used to cap headline inflation long after COVID, when it became normalised by Japan's peers. The BoJ holding rates artificially low in order to minimise debt servicing burden, allowing its currency to weaken to historical levels, an extremely dangerous suppression.
Japan uses FEFTA and stringent regulation to minimise foreign ownership, suppressing a much needed injection of dynamism to the economy.
These are long term issues, but for the markets, the BoJ/Yen/JGB dilemma is something to begin position for now.
Thank you, @MarkFarrington!
Bilal’s voice is one of optimism and inspiration during a time in history when Im not hearing it from very many other sources. His enthusiasm about President Trump and the admiration he expressed when he called Trump a modern-day Andrew Jackson was a breath of fresh air.
Good talk. I've been Marvin curious and am pleased with the biographical "how I ended up in this seat with you" opening as well as the current events chat.