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C IL | Saw my BIL over thanksgiving. He sets up risk management systems for traders and trading companies, works for a big consulting company. Clients like Shell, ADM, Exelon, etc. So he works across the entire commodity sector, and he works daily with traders and their staff, people where only money talks, how to get it, how to hedge against loss, etc.
The gist of the feeling at his level/peers is that USA’s winning of the trade war is inevitable and soon, and the only issue really left to resolve right now is the state sponsoring and condoning of IP theft. Also, that since it is an Asian country there is a loss-of-face issue for Xi, which is a complicating wrinkle, not impossible to get theough but Xi can’t just roll over.
The way he and his guys see it, the question is how soon do tariffs come down, he thinks possibly that the G20 could kick that off if talks go well. There is a real need for beans there, as we all know. Says there are reports circulating at his level of some fissures within the Politburo and a leading official there has publicly, in recent weeks, stated that putting tariffs on soybeans was foolish, ag should have been the last thing a food importer should put tariffs on. Which is a really strong/risky move for a Chinese official. I can’t find any news reports on that searching this morning, though.
His point, from the business/trading perspective, is that there is a lot of waving of the right hand and shouting and fury and noise on the TV screens, while the left is quietly doing the work.
He’s a B school guy but I don’t think he’s particularly political and if he were it would be moderate social lean left, moderate finance lean right. So it’s not a trump love affair, but just where people stand in his industry.
Grist for the mill.
Edited by sand85 11/23/2018 08:33
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Thanksgiving dinner review of soybean tariffs from a macro commodity hedger
