大年夜猴哥说前程…..

知道为什么股市大跌?

从Fed meeting minutes

有3件东西

1 tapering

2 raise interest rate

3 quantitative tightening

第3项 特别要命

就是Fed reduce balance sheet

Interest rate 上升，treasury bond price 下跌，会造成 liquidity issue, 比如repo market

Reduce balance sheet会造成cash shortage

这都会造成股票，地产市场大跌

而美国消费者的信心和购买力，绝大部分从中获得的

Bond 价格下跌，为啥会造成liquidity issue?

比如你需要10个bond作为collateral

现在你要13个，repo market就会渐渐失去流动性

资金流动不起来，经济就死了

这不但影响美国经济，欧洲美元市场也失去流动性，全球经济就垮了

When real interest rate becomes positive

CPI is at 8.x%

You raise interest rate to 3%

Still a big negative interest rate

有用吗?

Fed敢像80年的Fed Chairman Paul Volcker

加息加到18%

no， 20%

如果出现这样的情况，我所有流动资金买Fed 10-year treasury, I am settled for rest of my life.

这更增加了问题的复杂性

今年the best asset you want to hold is CASH

When liquidity dried up

现在的政治形势，迫使Fed must print price down

I am 100% certain that politician's 1st and utmost important priority is

Get reelected

I am 99% certain administration has a lot of influence on Fed

@Jy101 老大，我就是一个loser, 星期六晚上，还在谈经济学，没地方，没人一起嗨皮

The politician's way NOT to get re-elected is high consumer inflation

They have 0 chance if consumer inflation stays at 8%,9%

Janet will call Jeremy, we need to do something

Jeremy will say

Ok, I will do it, but if we bring down stock market and economy, how can you get reelected?

Heard of catch 22?

My utmost priority and best investment idea this year

Is long volatility

If you are an savvy investor and know how to do it, there is lots of money to be made

Worst scenario, stock market drop 50% in 2 months

This will destroy economy

Best scenario is fine tune interest rate so that

Consumer inflation goes from 8% to 7% to 6.5%

Politicians can say that see we are trending down

And stock market is grinding down, lose 40% in 2 years

This will make lots of weak hands sell their stocks at bottom or near bottom

这是拜登政府和联储会的博弈

Fed and politicians will choose 2nd option

Remember that will help them to get re-elected

Trump 4T, Biden 1.9T covid-19 relief package, 1.85T build back better act. Did I miss anything?

Balance sheet from 900B to 4.5T, how much to reduce?

It's about 8.5 trillion now

Market, I mean bond market

Especially short term bond market (up to 5 years treasury)

Has accepted and priced 4 rate hikes this year

But equity market participants have not accepted that

Once they realize and accept

Price will go down

So want I said and what 花姐said still are still intact now

一篇文章， sept 2021, 2-4T in repo market. In 2019, took 1T out, repo market dysfunctional 

Fed had to inject liquidity

For Real Estate, it will take longer time to reprice

Now it's time to buy hotels,  NY famous landmark, Oriental Mandarin, something like that, I can't remember, any new yorker? 2019 revenue 150 million, in pandemic, 15 million

An Asian investor injected 98 million to get 80% of the shares, Great bargain

Also I believe so called Fed Puts are just bullshit

If equity market drawdown does not crash economy, they don't give a fuss about it

So my feeling is 4 rate hikes and 60 billion QT each month can start as early as June

Can go as high as 80 billions a month

120B, not likely, they don't have that much for redemption each months

Of course they can start selling 

That will create market instability

Fed realized now, The problem is not people don't have enough money to consume

The problem now is too much money

they don't mind destroying some money as well as asset price, 降低财富效应

So don't let your money get destroyed in the process.