“If I talked about this, if I did ... what would I tell you? Who knows ... I would tell you when it happened. It happened a long time ago during the last days of reign of a just prince ... or should I talk about the place? A small town near the coast, but far from everything else ... or I do not know, I would tell you the princess without a voice or I would only warn you about the truth of these facts and about the story of love and loss and the monster who wanted to destroy everything ...
(Gael - Richard Jenkins)

“When he looks at me, he does not see what I am missing or how incomplete I am. He sees me for what I am. “ (Selma)

Taken from The Shape of Water by Guillermo Del Toro.

The amphibious creature of Guillermo Del Toro’s god or monster has swept the night of the US Oscars, bringing home four statuettes for best film, best director, set design and soundtrack.

We come from a long phase in which central banks have flooded the liquidity markets. Immense flows of pure water where they arrived brought fruit. The strength of water is that of not knowing barriers, flowing where there is need because there is a depression. The only law: to go fill the voids, at the lowest level and, from there, start to fill everything around. And then, again, to flow along the escape routes in search of arid areas to be irrigated. All this liquidity has brought into the economic world a strange form (one might say a god or monster) depending on which side you see it. A divine creature, like in the film, is capable of healing wounds, with a sensitive power but extraordinary strength. Or, this enormous liquidity can be viewed as a monster with the sole objective of exploiting, defeating, vivisecting or killing it, in order not to fall in the hands of historical enemies, like the Cold War, as in the movie.

You can fight the liquidity that, until today, has made the markets run, or you can try to build dams to stem it. Donald Trump decided to build dams. In full Cold War style, the US president has announced new duties, recalling the fears of a commercial war. In doing so, however, one kills that strange form that liquidity has created, because water bears fruit only when it flows; firm, immobile, and stagnate.

Trump’s trade war has destabilized some markets. Harnessing water, or better yet, economic growth, with barriers, can only slow down growth itself. Canada, China and Europe, after the announcement of the US steel and aluminum tariffs, ran to see how to react, and what new import taxes to include. China has declared that it does not want “a trade war with the United States, but it will absolutely not stop to watch while its interests are damaged. [we] will take the necessary measures “. It is not just a matter of trade barriers, Del Toro commented on the award recalling: “I am an immigrant, like Selma, like Gael [the protagonists in the film]. I think the good thing about our job is to cancel the lines in the sand and we must continue to do so despite the world telling us to trace them furthur. As a young boy in Mexico I would never have thought of making it and instead here I am. “

The strength and beauty of the markets is precisely this, thanks to their very low liquidity and barriers; they can afford to be fluid and, from time to time, go on to reward and invest in those countries that promise to grow better than others. The lack of walls for markets and investors has always been wealth. And Trump’s announcement is a frightening one. But there is also another reading: the American president, as he has already accustomed us in the past, is only raising his voice, with China in particular. The objective is not a war, but a peace. More fair-trade exchanges solve the huge US trade deficit. Under this reading, the decline of the markets is a good opportunity to purchase.

Crossing the sea, good news comes from Europe. Angela Merkel will, for the fourth time, be Chancellor. Inflation does not bite, so no haste to reduce liquidity, leaving the strange creature alive in the hope it will be able to conti- nue healing the wounds. So far, the public debt of the peripheral countries has managed to do very well. But now the concerns are not lacking, especially for the Italian electoral post, where all the parties have promised the impossible. To keep those promises would take a miracle. Or, as always,

maintain the usual script of faulting Europe. For now, we know that a monster, that of Italian public debt, is drowning in liquidity; tomorrow we will see.

As investors, we will continue to ride the liquidity; the goal is to navigate in these waters and if the seas, or the markets, are becoming a bit ‘more tortuous, we will move to safer shores without being afraid of erasing the fragile lines carved into the sand.