Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Hog's Gone Fishin]

Originally Posted by ghak99

The Tyson plant burning/shutdown news hit the market today as well.

Fun times all around.

I used to manage a Nucleus farm for Tyson Foods.

[displacedinMN]

Please explain to me what it meant when China devalued their currency.

[Hog's Gone Fishin]

Originally Posted by displacedinMN

Please explain to me what it meant when China devalued their currency.

They take their $100 bills and tell everybody their worth $90

[MahiMike]

Originally Posted by MahiMike

It's a bubble guys. Run! Get out at the top. Buy gold and wait for the crash.

Good time to repost this...

[ghak99]

Originally Posted by Hog's Gone Fishin

I used to manage a Nucleus farm for Tyson Foods.

This one was a beef plant. Somewhere around ~6000hd/day capacity and generally ran around 5k/day I believe. Probably a couple thousand employees, which sucks, but if the market doesn't shrug it off it'll probably serve a good ****ing to me in the short term.

[lewdog]

Originally Posted by MahiMike

Good time to repost this...

People have said we have hit a bubble since 2017! Timing the market correctly, while dumping that cash to gold isn't really a good plan for anyone. Unless you have that crystal ball on timing the market............

[DaFace]

Originally Posted by Hog's Gone Fishin

They take their $100 bills and tell everybody their worth $90

To take that a bit further, China is weird because they don't have a free economy, so they can literally determine what the currency's value is. They do it because it makes pretty much everything they export cheaper to outsiders.

[petegz28]

Originally Posted by DaFace

To take that a bit further, China is weird because they don't have a free economy, so they can literally determine what the currency's value is. They do it because it makes pretty much everything they export cheaper to outsiders.

The dirty secret is Chine NEEDS US $'s. They are hurting and companies are moving out of there for places like Vietnam. Talking heads that think they know everything say China is just waiting out Trump when in reality a Democrat like Elizabeth Warren would probably be even harder on China. China's only hope in that scenario is Joe Biden and that's unlikely.

If China would just agree to quit stealing our IP things would probably go back to the way they were for the most part.

[Buehler445]

Originally Posted by ghak99

The Tyson plant burning/shutdown news hit the market today as well.

Fun times all around.

Yeah. That wasn’t great. It will hit Garden pretty hard. I don’t know how many local cattle are killed there. I’m sure some are.

That’s pretty bad news.

[TwistedChief]

Originally Posted by displacedinMN

Please explain to me what it meant when China devalued their currency.

Given the trade war and worries about a Chinese slowdown, there are people who want to pull their money out of CNY (the Chinese currency) and put it into other currencies. Chinese manages a semi-pegged currency regime, so in order for the CNY not to depreciate relative to other currencies, the Chinese central bank (PBOC) has been buying CNY to prop it up. The USD/CNY level of 7 was thought to be particularly important as we hadn't crossed that since 2008.

Last week, because Trump decided to threaten 10% tariffs on a further 300bn of important (nb: these are the *really* important consumer goods that will be felt much more by all of us), China basically said, "Look, we're gonna be relaxed about where the CNY ends up fixing. We no longer view 7 as a line in the sand and will no longer buy CNY to keep it below that level." So, they allowed it to cross 7. This has two important implications: 1/ It's clearly an escalation on their side in response to Trump's actions. If one had been hoping for a calming of tensions, this pushed in the opposite direction. 2/ In simple economics terms, China becomes more competitive and exports deflation globally.

Hope this marginally helps.

[lewdog]

Originally Posted by petegz28

The dirty secret is Chine NEEDS US $'s. They are hurting and companies are moving out of there for places like Vietnam. Talking heads that think they know everything say China is just waiting out Trump when in reality a Democrat like Elizabeth Warren would probably be even harder on China. China's only hope in that scenario is Joe Biden and that's unlikely.

If China would just agree to quit stealing our IP things would probably go back to the way they were for the most part.

Originally Posted by TwistedChief

Given the trade war and worries about a Chinese slowdown, there are people who want to pull their money out of CNY (the Chinese currency) and put it into other currencies. Chinese manages a semi-pegged currency regime, so in order for the CNY not to depreciate relative to other currencies, the Chinese central bank (PBOC) has been buying CNY to prop it up. The USD/CNY level of 7 was thought to be particularly important as we hadn't crossed that since 2008.

Last week, because Trump decided to threaten 10% tariffs on a further 300bn of important (nb: these are the *really* important consumer goods that will be felt much more by all of us), China basically said, "Look, we're gonna be relaxed about where the CNY ends up fixing. We no longer view 7 as a line in the sand and will no longer buy CNY to keep it below that level." So, they allowed it to cross 7. This has two important implications: 1/ It's clearly an escalation on their side in response to Trump's actions. If one had been hoping for a calming of tensions, this pushed in the opposite direction. 2/ In simple economics terms, China becomes more competitive and exports deflation globally.

Hope this marginally helps.

You two need to post more in this thread.

Thanks in advance.

[petegz28]

Trump removed certain items, including cell phones, from the tariff list this morning. Market up 500+

[Great Expectations]

When China devalues their currency does our national debt load slow just a little? I know they own a decent portion of it.

[lewdog]

I bought SPY yesterday when it bounced off its 200 day moving average twice in one week.

[TwistedChief]

Originally Posted by Great Expectations

When China devalues their currency does our national debt load slow just a little? I know they own a decent portion of it.

No. Nothing changes with respect to the amount of our national debt.

You're correct that they own a large amount of Treasuries, and you're correct that what they do with their currency has implications for their holdings of Treasuries. But that doesn't directly affect our national debt at all. It's just a transfer from their holdings to those of other investors (or vice versa).

Earlier I mentioned that China is trying to control capital outflows and thus was buying their currency. When they do that, they're selling dollars. And typically they get the dollars to sell by selling Treasury securities.

By letting their currency depreciate (devalue), they actually need to sell fewer dollars and thus fewer Treasury securities.

(My profession by the way is trading interest rates and fixed income markets like Treasuries.)