No-brainer Investments: Brazil and Mexico
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From Twitter: "The US is speaking Portuguese and doesn’t even know it. The US is approx 2-3 qtrs behind Brazil in terms of stagflationary roadmap. Today’s window of US vulnerability/soft patch is where Bz was back in the fall." https://twitter.com/PauloMacro/status/1522410131123851265?t=1gycA91xazgGcbfyUcke2Q&s=19
Well, I'm Brazilian. From a pure economic perspective, Brazil is ready to take off since the commodities bull cycle started around 2016/2017. If the macro situation improves, with a weak dollar and strong commodities, I would say the future is bright for the country.
On the other hand, a pure economic analysis, in my opinion, fails to grasp the whole situation. it takes a political analysis to really understand what is going on. Of course, one can only imagine what is the reality in that area, since there is a lot of biased information. But here are some facts and my opinion as a local:
What is going on Brazil is a massive ideological battle. Majority of the population favors…
Interesting comment about macro funds outperforming because they are liquidity providers. Liquidity provision is the right strategy for a regime of liquidity tightening. It also explains why macro did poorly during the QE era, as liquidity provision is the wrong strategy for a liquidity easing regime.