in a shocking turn of events
Trump follows through
$50 billion worth of tariffs will be imposed on China’s annual imports to the USA. Or will they? What started as steel and aluminium tariffs soon has broad exemptions for NAFTA trading partners and then Europe. Dr Catherine Mann, Citi Global Chief Economist had this to say about the tariff’s economic impact:
“We’re not looking at a macroeconomic effect coming out of this trade-skirmishing. The pattern that we have observed is that there is a huge announcement, and then there is a backtrack”
And now somehow the rhetoric coming out of Washington is centred around stealing (maybe it was steal not steel all along) intellectual property. More from Dr Mann:
“Big announcement; big political gain, but when it comes right down to it, the [Trump economic] team is searching for the least economic cost they can get out of it”
Oh well, at least Trump is finally acting like a politician? So, is anything different? Dr Willen Bauiter, Citi Special Economic Adviser says:
“The rhetoric has gotten more aggressive… the notion that trade deficits are bad is mercantilist nonsense. But what they [trade deficits] are is that they are not indefinitely sustainable”
Let’s see how this unfolds, in the meantime enjoy the VIX.
China bans the letter ‘n’
As President Xi takes power indefinitely in China, as a preemptive response to possible protests over this, China has banned the letter ‘n’. This was in a move to ban rhetoric against lifting term limits from the president’s office; ‘n>2’ tags aggreged social media pushback to this change. So, banning the letter ‘n’ seemed to be the obvious response.
and, remember FarmVille?
Facebook has been feeling the heat from the fallout of the Cambridge Analytica debacle, and the #DeleteFacebook tag appeared over 10,000 times last Wednesday. Ian Bogost developer of the game Cow Clicker writes:
What does it matter if a simple diversion has your Facebook ID, education, and work affiliations? Especially since [Cow Clicker’s] solo creator (that’s me) was too dumb or too lazy to exploit that data toward pernicious ends. But even if I hadn’t thought about it at the time, I could have done so years later, long after the cows vanished, and once Cow Clicker players forgot that they’d ever installed my app.
Mark Zuckerberg’s reaction to the whole thing has been as disappointing as the quality of coffee in Tepper; but then there was not much that he could have said. More from Mr Bogost:
This is also why Zuckerberg’s response to the present controversy feels so toothless. Facebook has vowed to audit companies that have collected, shared, or sold large volumes of data in violation of its policy, but the company cannot close the Pandora’s box it opened a decade ago when it first allowed external apps to collect Facebook user data. That information is now in the hands of thousands, maybe millions of people.
Have you deleted FB yet? Don’t forget to download your data first.
[Book Recommendation] The Better Angels of our Nature: Why Violence Has Declined
This is one of my favourite non-fiction books, and for a book with violence in its title, it is very optimistic. Steven Pinker runs through the history of mankind and its depravities and presents an excellent case of why violence has declined to a new normal where it is almost nonexistent. Bill Gates writes:
“For years, I’ve been saying Steven Pinker’s The Better Angels of Our Nature was the best book I’d read in a decade. If I could recommend just one book for anyone to pick up, that was it. Pinker uses meticulous research to argue that we are living in the most peaceful time in human history. I’d never seen such a clear explanation of progress.”
Pinker goes in excruciating detail in presenting statistics and data to back his thesis. Trying to summarize the book is futile, but the optimism of the book is very well captured in a hypothetical commencement speech Pinker writes for his graduation in 1976:
“…the nightmare that has darkened your lives since your early memories of cowering in fallout shelters, a nuclear doomsday in a Third World War, will come to an end. In a decade the Soviet Union will declare peace with the West, and the Cold War will be over without a shot being fired. … During the next thirty-five years, no nuclear weapon will be used against an enemy. In fact, there will be no wars between major nations at all. …
Fascism too will vanish from Europe, then from much of the rest of the world. Portugal, Spain, and Greece will become liberal democracies. So will Taiwan, South Korea, and most of South and Central America. …
Many of these developments will be the result of long and courageous struggles. But some of them will just happen, catching everyone by surprise.”
Faith in humanity restored?
And finally, April 17 is Tax Day
The imaginatively named podcast of the authors of Freakonomics, “Freakonomics Radio” is putting together a series on taxes, with tax season around the corner. On this week’s (rebroadcast) episode Dubner explores the special tax on smart people; the loss of returns for people who think they are smart enough to sustainably beat the market. Jack Bogle, founder of Vanguard funds:
If the market return is 7 percent and the active manager gives you 5 after that 2 percent cost, and the index fund gives you 6.96 after that four basis point cost — you don’t appreciate it much in a year — but over 50 years, believe it or not, a dollar invested at 7 percent grows to around $32 and a dollar invested at 5 percent grows to about $10.
Think what an investor thinks about when he looks at that number. He says, “Wait a minute! I put up 100 percent of the capital. I took 100 percent of the risk and I got 33 percent of the return.” Well, anybody that thinks that’s a good deal, I’ve got a bridge I want to sell them.”
Oh and, The Mooch Anthony Scaramucci (shortest serving member of Trump’s staff) also makes an appearance in the episode.
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Views expressed are those of the writer alone. This week’s musings brought to you by Rafay Mahmood. Comment, Subscribe, Share. ♠