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Breakfast Briefing: Trump’s Trade War, Carney on Cryptos & Guns

Trump’s Trade War Escalates

After Trump slapped tariffs on imported steel and aluminium, other nations threaten retaliation.

Editor’s Remarks: The White House announced last week that it would impose a 25% tariff on imported steel and 10% on foreign aluminium. Although Trump’s rhetoric has thus far taken aim at the trade imbalance between the US and China, Canada is in fact the largest exporter of steel to the country. The EU – effectively the world’s largest protectionist bloc – has denounced Trump’s protectionism and singled out Levi’s, Harley-Davidson and Kentucky bourbon as US icons that might be hit with retaliatory tariffs. While the west wages economic war with itself, Russia recently unveiled a new range of nuclear weapons.

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Carney Talks Cryptos Again

The Bank of England chief once again aired his views on cryptocurrencies.

Editor’s Remarks: There has so far been a lot of back and forth over the cryptocurrency issue from the world’s central bankers – and Mark Carney’s latest comments have been no different. While he claimed that cryptocurrencies had failed as alternative currencies, he (in apparent contradiction) also said they would make direct payments easier. He also added that the time for lax crypto regulation is and that while an outright ban is off the cards, governments should move to regulate crypto exchanges. Overall, despite the lack of clarity, Carney appeared bullish on high-quality cryptocurrencies.​

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Helios Plans $2bn IPO

One of the largest Sub-Saharan telecom firms is planning an IPO in early April.

Editor’s Remarks: The rationale behind the IPO is that it will enable major shareholders, including Soros Fund Management, to trim their positions. The listing will take place both in London and Johannesburg, with around 25% of the company’s shares floating freely after the IPO. Helios says that it wants to make use of the buoyant equity markets to expand its phone-mast operations across Africa as wireless technologies take off there. In three out of the four countries in which it operates, Helios is the only independent phone tower company, giving it an effective monopoly in those areas.

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Harvard Takes $1bn Hit

Last year, the university wrote down the value of its natural resources portfolio by $1.1bn.

Editor’s Remarks: Around six years ago, Harvard’s endowment managers decided to invest in northeastern Brazilian agriculture – an area it felt was ripe for rapid growth. However, the bet failed to pay off and would-be profits derived from tomatoes, sugar, ethanol and energy failed to materialise, let alone outstrip returns from traditional stocks and bonds. The natural resources portfolio also lost bets on Central Californian vineyards, teak forests in Central America and Australian cotton farms, among a host of other, seemingly disconnected investments. Overall, Harvard’s money managers have returned just 4.4% per annum compared to the university average of 4.6% in the past decade.

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Gun Sales Slump in the US

Despite huge gains during the Obama presidency, gun sales have steeply declined under Trump.

Editor’s Remarks: The iconic Smith & Wesson brand is reeling from falling sales, prompting its owner, American Outdoor Brands, to slash jobs and pay down debt. Under Obama, somewhat counter-intuitively, gun sales soared as pro-gun citizens decided to load up on firearms in case the government imposed stricter regulations. It was a classic case of an intended clampdown (one, which in this case, never actually materialised) having the opposite effect to that which was intended. Now that the Republicans are in power, gun-owners are relaxing their purchasing habits. It seems the horrors of recent mass shootings are having less of an effect on the industry than people think.

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