Matthew Lekushoff |


Recent financial news has been dominated by the China-U.S. trade war. Last week, the U.S. increased tariffs on $200 billion of Chinese imports, and the tariff rate rose from 10 to 25 per cent. China retaliated with tariffs on 5,200 American products, ranging from 5 to 25 per cent. As a result, global stock markets were jolted out of their steady climb. 

As most stock markets fell, gold, often considered a safe haven, behaved as expected-----  by rising. Canadian REITs and bonds also benefited from the uncertainty. It's comforting to see historically low correlated asset classes still continue to provide stability when needed.

Will the trade war escalate? It's hard to tell. For some time President Trump has painted China as a trade cheater. He won't want to be known for letting that continue. President Xi, on the other hand, is also proud. Giving into U.S. demands, especially without a fight would, will make China look weak at home and abroad. Yet, both parties know a protracted trade war is bad for both sides. It's an interesting game of chicken.

For some perspective on the importance of global trade, I've curated a few videos below that might be helpful:


A Rule Against Murder  by Louise Penny: The more I read the Chief Inspector Gamache series, the more I'm enjoying it. This fourth book (of 15 in the series) not only brings a change in format, it also dishes some juicy information on a few characters I've grown quite attached to. I foresee the fifth book in my not too distant future.
The Shadow Side of Greatness  by James Clear: Extreme success is usually admired and envied. Often forgotten, however, is that outliers often pursue their passions at the expense of living a balanced life. This article is about the cost of that imbalance.
It's Time to Look More Carefully at "Monetary Policy 3 (MP3)" and "Modern Monetary Theory (MMT)"  by Ray Dalio: Two months ago, I'd barely heard of modern monetary theory (MMT). It's gaining support among U.S. advocates on the political left. This article by Ray Dalio explains the ins and outs of MMT and provides details on how fiscal and monetary policies are used. It gets a little into the weeds, but will be helpful if you enjoy economics or plan on following the U.S. Democratic leadership race. Stephanie Kelton, economic advisor to Bernie Sanders, offers another perspective on MMT , albeit a less impartial one.
Bill Gates, Charlie Munger, Warren Buffett on the Socialism vs. Capitalism Debate  by CNBC Television: Related to the rise of MMT is the increasing debate framed as socialism versus capitalism. In a recent interview, three of the world's wisest (in my opinion) and wealthiest people, Bill Gates, Charlie Munger and Warren Buffet, provided their takes on this conversation.
For Gates, in particular, the discussion is less about socialism versus capitalism, but rather about the different strands of capitalism. Higher taxation and a social safety net - commonly accepted to be more socialist tenets - for example, can still exist within a capitalist society, as many social democrats argue.
Geographic Diversification Can be a Lifesaver  by Bridgewater: It's well known that a geographically diversified portfolio is usually less volatile than one that isn't. This Bridgewater report, using data as far back as 1900, illustrates how important geographic diversification really is.
The History of Europe: Every Year  by Cottereau: If you don't think history is the record of chaotic change, this 12-minute video will convince you otherwise.
Infant Mortality in Africa Since 1950  by Our World in Data: I love videos like this! It's incredible to see how much infant mortality has fallen in Africa. Let's hope this trend continues!


"Anger drives out reason." 
- Charlie Munger

  • I'm not a basketball fan, but this last-second basket by Toronto Raptor Kawhi Leonard was pretty epic!

  • Buffalo Bills fans recently lost a member of our family this week. Sadly, Super-Fan Ezra Castro (aka Pancho Billa), lost his fight to cancer on Tuesday. This touching tribute by journalist Jonah Javad is a reminder there is often more to sports than just winning and losing.

Matthew Lekushoff

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