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Behind the emergence of "money shortage"
The phenomenon of “money shortage†that surfaced at the end of June actually has a profound internal and external environmental impact. A simple focus on international or domestic changes will lead to a one-sided understanding.
1) Internationally, the QE exit schedule is announced
Federal Reserve Chairman Ben Bernanke said on June 19 that if the economic recovery is in line with expectations, it will slow down the purchase of bonds before the end of this year, end the purchase of bonds next year, and start raising interest rates after "a few quarters" when the unemployment rate drops to 6.5%. This is the clearest quantitative easing exit schedule given by the Fed so far, which confirms the biggest concern in the market in the near future. Although the short-term reaction of the global financial market is generally negative, in the medium and long term, the gradual withdrawal of the Fed may lead to the differentiation of asset prices in various categories and regions.
According to the latest Fed expectations, if the current recovery progress can be maintained, the US unemployment rate is expected to fall to 7% in the middle of next year, thus activating the button to end the purchase of bonds. If the economy recovers according to current progress, this goal should be achieved. However, there are two major risks in this period that still need to be vigilant:
First, interest rates will rise as monetary policy is expected to tighten. If interest rate fluctuations are difficult to control, it may pose a threat to the US's moderate economic recovery. The data shows that the US 10-year bond yield has risen from 1.66% at the beginning of May to the current 2.33% due to the expected increase in volume, which is the highest since March last year. According to the International Monetary Fund, the US long-term bond yield will drop by 100 basis points, which will increase the US economic growth by an average of 2 percentage points. Conversely, if the interest rate rises, the consequences will be obvious.
Second, the direction of fiscal policy will also be a key factor in the Fed's consideration of the progress of debt purchase. In fact, the open quantitative easing launched at the end of last year, part of the goal is to offset the market's concerns about the "fiscal cliff." Although the negative impact of the automatic deficit reduction mechanism in the United States has eased, it will take some time to completely digest these effects. In particular, in the second half of the year, the debt ceiling issue will return to the horizon, and the dispute between the two parties in Congress may be restarted. Similar to the “debt limit†in the summer of 2011, it is still possible to repeat itself. Before the above-mentioned uncertainty is cleared, the Fed should not rashly stop the "blood transfusion" of the economy.
In this regard, the Fed will still be based on the "wait and see" position in the short-term. If the economic data is strong, it is possible to cut the scale of monthly purchases in advance. If the economic recovery shows upsets, the exit time will be postponed. However, the Fed cannot implement quantitative easing indefinitely. Once the stimulus policy is over, it will inevitably lead to changes in capital flows, which will cause global financial market volatility. In the medium and long term, this may cause the trend of assets in various categories and regions to differentiate.
On the one hand, the end of the stimulus policy will inevitably push the dollar to strengthen in the medium and long term. The rising attractiveness of US dollar assets may lead to the return of global capital to the US market, which will expose emerging Asian economies to the risk of concentrated capital outflows. In the case of the withdrawal of cheap capital, emerging Asian economies will face an unfavorable situation of rising interest rates, and some of the bubble real estate market will be under pressure. In terms of the stock market, considering that the economic growth of some emerging economies is generally moderate, the valuation of some markets and the economic fundamentals have already deviated greatly. The reduction of liquidity will force this deviation to be adjusted. The market price-earnings ratio of these markets should be reduced. .
In contrast, the stock market in developed economies such as the United States will still be supported by the strength of the economic fundamentals and the relatively abundant liquidity. In the short-term, the expansion of the real estate market and private consumption has made the US economic recovery in the forefront of advanced economies. The energy revolution in manufacturing revitalization and shale gas development has laid the foundation for US medium- and long-term economic growth. As long as the above trends do not change much, economic expansion and corporate earnings growth will continue to support the US stock market.
The prospect of the US economic recovery is gratifying, and it has also changed the expectation of international capital flows. The capital flowing out in the past few years will inevitably return to the United States. For the domestic market, if there is no real economic development, the capital that flows out in a short time will inevitably The result of deflation is the most worrying situation of the current macro management.
2) Domestic, deflation and inflation expectations coexist, and adjustment is more difficult
In recent years, under the strong promotion of the regulatory authorities, the growth rate and increment of SME loans are “not lower than twoâ€, but the current proportion is still only about 18%. The second is the real economy and the virtual economic structure. From the end of 2011, the decision-making level began to emphasize the financial services real economy. Since there is no clear definition of the real economy and the virtual economy, it is difficult to count those loans that belong to the real economy and those loans belong to the virtual economy. A simple observation indicator commonly used in the industry is medium- and long-term loans of the company. It is believed that the medium and long-term loans of the company are mostly physical loans. The data shows that the proportion of medium and long-term loans of the company has continued to decline in the past two years, from 58.9% at the end of March 2011 to 52.6% in May this year. According to this, it can be considered that the bank's support for the real economy is declining.
However, the decision makers are even more dissatisfied with the incremental structure this year. From the perspective of industry structure, this year's new loans and real estate sector accounted for the bulk. In the first quarter, real estate development loans of all financial institutions increased by 21.4% year-on-year, and personal housing loans increased by 17.4% year-on-year, which was much higher than the overall growth rate of various loans during the same period (14.9%). Not only that, but most of the financing other than traditional bank loans such as trust credit, entrusted loans, and wealth management financing have also been invested in the real estate sector. From the perspective of large and medium-sized enterprises loans, although the growth rate of small business loans is still higher than that of large enterprises, the growth rate of small business loans is lower than last year, and the growth rate of large enterprise loans is higher than last year. In fact, due to the relatively narrow financing channels other than SME banks, the financing dilemma of small enterprises this year is actually more serious than last year. From the perspective of the real economy, the real use of loans for the real economy is not high. From January to May, the new medium- and long-term loans of the company category decreased month by month, and the new bill financing loans increased month by month. At the end of May, the RMB loan balance grew at a rate of 14.5% year-on-year, but the company's medium and long-term loan balance grew by only 7.5%.
From the debt side, the currency is actually the deposit of the banking system, which corresponds to the financial wealth of residents and enterprises. Its structural adjustment involves the redistribution of social wealth. This is not the responsibility of the monetary and credit policy. But monetary policy is not inaction, it involves the creation of money. Also according to the overview of deposit-taking financial companies, you can get the approximate equation M2 = foreign exchange payments + bank loans + non-bank sector bonds held by banks. Among them, foreign exchange is the basic currency of the central bank, while loans and bond investments are bank-derived currencies. According to the author's calculations, the three explanations for M2 growth have been almost perfect in the past decade.
Further, the foreign exchange account is formed by the central bank purchasing foreign exchange with the base currency, which is a passive investment under the double surplus and exchange rate control; the bank loan loan to whom is not loaned to, is actually the question of who to send money; bank bond investment, It is the embodiment of direct financing development to promote changes in the structure of social financing. At least since the exchange rate reform in 2005, most of the years are net inflows of hot money, and a considerable part of the base currency is unnecessary. In addition to the structural problems mentioned above, bank loans also have the problem of partial arbitrage of loans in the financial system: some companies use metal trade to circulate mortgage arbitrage between domestic and foreign entities, and some bank branches and enterprises collude Acceptance of bills inflated loans and deposits, some companies purchase bank wealth management products by acquiring low-interest bank loans, and so on.
Recently, Chinese Premier Li Keqiang proposed at the relevant meeting that it should support the development of the real economy by activating the stock of money and credit. Some people think that the concept of "money and credit stocks" is vague, and the theory of activation is even more difficult to talk about. The act of activating the stock of money and credit precisely reflects the clear understanding of the current high-level issues of China's monetary credit and the operation of the real economy. It has rich economic policy implications and should be given high attention. According to the author's understanding, the decision-making level will respond to the existing structural contradictions through the structural adjustment of monetary policy, and the determination and precision will be very different from the previous government's “and muddy†regulation.
To activate the currency credit stock, first of all, the decision-making level believes that the current total amount of money and credit is sufficient, the tone of the sound monetary policy will not change, and it will not cut interest rates and increase credit supply. As for the word "activation", it does not literally increase the speed of money and credit circulation, but mainly refers to the adjustment of the structure of money and credit. The word monetary credit is taken apart. The currency is the bank's debt. Credit is the bank's assets. Activate the money and credit stock, that is, adjust the balance sheet structure of the banking system.
There are at least three aspects of policy implications for activating the currency credit stock:
First of all, we must pay close attention to and continuously increase the adjustment of the investment structure of stock loans. In recent years, the regulatory department's investment management of bank loans mainly includes two aspects: First, encouragement and even mandatory placement in key support areas, such as small enterprises, “agriculture, rural areas and farmersâ€, and affordable housing. Second, strict control over some areas. Loans, such as real estate development, local government investment and financing platforms, "two high and one surplus" industry. The incremental investment of loans is necessary and effective, but after all, it is only incremental adjustment and progress is slow. In order to truly adjust the loan investment structure, we must also adjust the structure of the stock loan. Second, improve the exchange rate mechanism, curb local investment impulses, and reduce passive currency investment.
Second, we must be highly alert to the resumption of large-scale investment by local governments in the name of new urbanization. This will not only drive a new round of monetary investment, but also hinder the restructuring of the existing loan structure. For the reasonable capital demand in the new urbanization construction, more direct financing through the bond market should be carried out. On the one hand, it is conducive to increasing the transparency and binding of local financing. On the other hand, the direct financing of indirect financing such as loans is relatively small.
Finally, in order to deepen reform, the bottleneck of factors will be lifted and the viability of the economy will be released. After years of demand management path based on increasing monetary aggregates, macroeconomic policies should shift to supply management, improve potential economic growth by eliminating factor bottlenecks, and form a supporting role for total factor productivity.
Steel price trend forecast in the second half of the year
Since June, the international iron ore price has fallen sharply. Although there is a downward trend in steel prices, the author believes that the international iron ore giants will improve their financial status by focusing on price reduction sales, decorating their own semi-annual report data, and shocking China. The normal production of domestic iron ore, through the extrusion effect, has caused a large number of small and medium iron ore producers to shut down and turn. However, this kind of operation can only be carried out in a short period of time, and the recent appreciation of the RMB exchange rate has intensified the ability of domestic enterprises to purchase abroad. The continuous rise of the shipping index has also confirmed that domestic iron ore demand has not changed fundamentally.
There were special reasons for the loss of the steel plant in the first half of the year, mainly because the high-priced iron ore purchased at the beginning of the year pushed up the production cost, and the steel price fell against the market, which caused the steel mill to transfer the production cost downstream. After half a year of digestion, it is basically Low-cost raw materials, and reduce the procurement of raw materials, reduce production costs, the profitability of steel mills will improve in the second half. From this perspective, steel mills have not once again significantly reduced the power of steel prices.
The structural adjustment of monetary policy will also bring new vitality to the steel market. On the one hand, after the “de-leveraging†of the previous period, the current moisture of steel prices is almost completely squeezed out, and the rebounding power is also accumulating. On the other hand, Monetary policy will activate the stock of money and direct the flow of money to the real economy, which is also a good improvement for the downstream demand for steel.
According to the author's understanding, the steel market in the second half of the year will be better than the first half of the year, and in the second half of the year, the steel industry, which is an overcapacity industry, will promote the merger and reorganization of the steel industry through strict environmental protection. The handling of the two violation approval cases in Hebei has already issued a serious warning to local governments that consider the local interests to cover backward production capacity. In the second half of the year, the release of production capacity in the steel industry will be controlled by factors such as environmental protection and mergers. Steel prices remain cautiously optimistic.
Forecasting steel price trend in the second half of the year through "money shortage"
Summary continued to fall through the first half of the current steel prices have returned to last year's lows, small technical rebound in emerging, but steel is still not completely get rid of a downward spiral, in the meantime, monetary conditions have emerged in unexpected reason The change, from the early emergence of inflation, the emergence of...
After the continuous decline in the first half of the year, the current steel price has returned to the low point of last year, and the technical small rebound has continued to appear, but the steel price has not completely shaken off the decline channel. At the same time, the monetary environment has unexpectedly been reasonable. The change has changed from the rapid emergence of inflation in the early stage to the sudden increase of funds. The sudden cooling of the currency situation has also added new impetus to the decline in steel market prices. What changes have caused the short-term monetary environment to freeze, only careful analysis The background of this situation can be sure of the advancement of macro-control changes in the second half of the year, and then the trend of steel prices in the second half of the year is clear. Below, the author makes a brief analysis of the current market situation based on the materials mastered by various parties.