Brazil and Turkey recover
Today the prevailing trends of the recent past have reversed and the Brazilian Real as well as the Turkish Lira have found a welcome respite from their eye-watering swoons in value against the USD. Neither is likely to be long lived. Still, we are trend followers and we sail with the prevailing winds.
In a reversal of recent very sharp declines on the value of the Lira the Turkish government, such that it is, took a stand to strengthen, if not the economy then the img of management.
The Yuan weakened and will continue to lose value these days as the Chinese economy is showing signs of significant weakness and a slowing of growth. Industrial production figures disappointed yesterday as well as factory orders showing signs that the tremendous debt burdens of the Peoples Bank and the crony loans they have been doling out since the Long March are straining the system and restricting growth. The tariffs don’t help.
Milan Index Down
Italy, the sick man of the Euro, having replaced the recovering Greek economy, is ill. She is strapped with a great deal of expensive debt, largely held by Frankfurt. Nobody likes being beholden to the Germans, even when they wear Hugo Boss designed business suits rather than uniforms. The Milan Index is down today for reasons more related to the bridge collapse than the overall economy. Nonetheless, the market has no stomach for buying today and we are short the Milan.