5 October 2016: Soft protectionism

eijff-rndToday, an interview with Sylvester Eijffinger, professor of economics at Tilburg University, was published in Het Financieele Dagblad. The article focuses on what might happen to the world economy if Donald Trump becomes the next President of the United States. Eijffinger calls that outcome of the US elections ‘dangerous’. Not one time, but at least four times. Trump’s isolationism could lead to the biggest trade war in almost 90 years. And although it will take some time to negotiate new trade agreements within the framework of the World Trade Organization, according to Eijffinger President Trump will have enough options to frustrate a free flow of goods and persons between the US and the rest of the world. The White House is able to take all kinds of measures that could be placed under the header of ‘soft protectionism’: impose import taxes and introduce more bureaucracy and delaying measures which will hinder the import of goods from countries such as China and Mexico. Eijffinger is asked whether or not he thinks that Trump will indeed be elected the next President of the US: “The Brexit has taught me that I should not comment on a matter like this.”


white-chapel-logo-smallL’histoire se répète.
Just like Monday, all major US indices were down yesterday, the VIX went up and yet our UVXY ETFs closed slightly lower. What were short-term futures traders thinking? And although a slew of reports from the government will be released this week, volatility futures investors obviously do not expect much from this. Normally, at least one or two of those reports would cause a rise of volatility. The upcoming days, we will see who will be right. If volatility futures investors are wrong, we might see a steep rise in the value of our UVXY ETFs. Until then, we have to live with the small loss: return for the year dropped to 202% and return for the quarter stands at -1.5%.
White Chapel did not give a signal at the end of yesterday’s session. Our model is still happy with the volatilty securities that we own.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$30,168

+201.68%

+201.68%

-1.5%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 338%.

RS_v05-smallRené’s father is a musical enthusiast who owned and played several Hammond organs (with Leslie speakers), as well as many acoustic, electric and steel (Hawaiian) guitars. Anyone who ever visited him, surely reminds him playing Procol Harum’s “A Whiter Shade of Pale” flawlessly on his Hammond M102, the same model that Matthew Fisher played while recording the original song back in 1967.
While visiting his parents, René was asked if he would be interested in his father’s Roland RA-50, because he no longer intended to use it. To René, not being much of a musically literate person (to say the least), this machine looked like “a modern gadget from the past – but what is it?”
Introduced in the 1980’s, the Roland RA-50 is a professional, multi-instrument realtime auto-arranger and a MIDI expander box. René may be a computer nerd, but being musically virtually illiterate, this terminology is far beyond his comprehension. Even the simple act of (trying to) make the machine produce a sound that pleases the ears, is a humbling experience for him. So he said “yes, please!” and took it home.
roland-ra-50