Thursday, February 9, 2017

Give Corruption A Chance: Trump Is Imploding Mexico

Trump is taking on the 7.4 billion people who didn't vote for him. I am guessing he will lose...

The Peso keeps sliding which is stoking inflation. The Mexican Central Bank has doubled interest rates in the past year to stem capital outflow. Compliments of non-stop Twitter rhetoric, Mexico's economy is imploding. Various economic forecasts predict either minimal growth or a recession this year. However, interest rates usually operate with a multi-month economic lag, so these rate increases could tip the scales to recession. 

Mexico is caught in the death spiral of higher rates and lower currency:

Peso (red) with interest rates (black):

"NAFTA is the worst trade deal ever"

Get a fucking brain, you dunce
The trade deficit with Mexico is lower than China, Germany, and Japan:

And NAFTA is by far the most important trade relationship for U.S. GDP:

The TrumpPlosion trade caught a short-covering bid today. Which means it will resume imploding tomorrow.

Joined by Oil which just backtested its trend-line: