One of the neat things about efficient markets is how it is perceived by almost everyone (ie, noneconomists) as an out of touch, conservative, status quo. In fact, nothing could be more revolutionary. To tell someone that they probably can't outwit the markets, especially if they don't have any well honed edge, is the kind of cruel but kind advice most people need, but few want to accept.
Thus it's fun to see billionaires like Bill Gates commenting on the dollar. To wit:
Thus it's fun to see billionaires like Bill Gates commenting on the dollar. To wit:
Gates is concerned that widening US budget and trade deficits are undermining the dollar, a view which was also articulated at Davos by Jean-Claude Trichet, the president of the European Central Bank, Gerhard Schroeder, the German chancellor, and influential members of the business world.As if markets were unaware of the deficit situation. Gates and Buffet need to know that 1) the dollar is already undervalued on a purchasing power parity basis vis-a-vis Europe and close with the Yen (see the latest Big Mac Index) and 2) only revisions to current deficit projections will hurt the dollar. Instead, they look at the current deficits (in the upturn of a business cycle), and see disequilibrium that can only be fixed by a falling dollar, neglecting the existing knowledge and foresight of the FX speculators.
...
"Unless we have a major change in trade policies, I don't see how the dollar can avoid going down," Buffet said ten days ago. Gates joined the board of Berkshire Hathaway last month.
Gates was more upbeat about the economic prospects of China, which he described as a "change agent" for the next two years.
HedgeFundGuy - am 2005-01-31 03:24 - Rubrik: Finance
Mahalanobis meinte am 31. Jan, 05:35:
China’s revaluation yoyo
Fun^2:
The latest swing in the in the Chinese verbal yo-yo came from the “leave-us-alone” camp when both Vice Premier Huang Ju and People`s Bank of China Deputy Governor Li Ruogu rebuffed calls from Europe and the to revalue the yuan. The officials said at the World Economic Forum in Davos, Switzerland: `` We are happy and willing to listen, but don`t ask us to practice what you say”. There were some market moving comments last week when Chinese central bank official Yu Yongding said it was time to make the yuan more flexible, thereby giving some luster to the Japanese currency. But the yen pulled lower later in the Friday session after Dow Jones news wires reported another central bank official saying Yu’s comments were not the government’s official view. {Forex News}Ha ha ha.
stxx meinte am 2. Feb, 17:41:
Now, that even non-experts in financial markets (I perceive Bill Gates as a successful manager in the software industry rather than a successful speculator) point out the weakness in the USD I "feel" that the dollar cannot go lower any more.
pauln meinte am 2. Feb, 22:03:
Gates + Mao
More disturbing to me than Gates' ignorance of efficient markets is his adoration with central planning, evident from the same speech as the one quoted above:---
Gates continued by heaping praise on the current generation of Chinese leaders.
"They're smart," he said with emphasis.
"They have this mericratic way of picking people for these government posts where you rotate into the university and really think about state allocation of resources and the welfare of the country and then you rotate back into some bureaucratic position."
---
Maybe this is somewhat forgiveable for a CEO, since the way corporations are run is something like central planning, but to be honest it sort of sickens me.
