Re: Trump's Trade War
Posted: Wed May 22, 2019 8:10 am
Generally speaking, the wisdom of the crowd,
aka the markets, are smarter than individuals, even "experts".
Most experts believe the market is "efficient" in the long run.
That means it "prices in" all available information.
The reason is simple.
If there is an inefficiency, traders will exploit that and do arbitrage.
Which is just making money on the difference.
Because of that, the inefficiency goes away - the trades exist until there
is no spread. Because making money is a time-cconstrained sport (down to milliseconds), the inefficiencies don't last long at all.
If we look at the current "futures" and markets, stocks are up in Asia and USA.
This is because Trump is seen as backpedaling on Huawei.
Which the market seems to think means movement toward trade agreements.
The "information" should include political and jobs info.
Now I'm not a "conservative", and this is fairly standard WSJ/MBA type of stuff, but it makes common sense.
aka the markets, are smarter than individuals, even "experts".
Most experts believe the market is "efficient" in the long run.
That means it "prices in" all available information.
The reason is simple.
If there is an inefficiency, traders will exploit that and do arbitrage.
Which is just making money on the difference.
Because of that, the inefficiency goes away - the trades exist until there
is no spread. Because making money is a time-cconstrained sport (down to milliseconds), the inefficiencies don't last long at all.
If we look at the current "futures" and markets, stocks are up in Asia and USA.
This is because Trump is seen as backpedaling on Huawei.
Which the market seems to think means movement toward trade agreements.
The "information" should include political and jobs info.
Now I'm not a "conservative", and this is fairly standard WSJ/MBA type of stuff, but it makes common sense.