大年夜猴哥论前程， pt 2

at this point, I presented 1 side of the coin, I have presented to you another side of the coin.

And the prediction of any kind on Fed, market movement is a fool's errands

History has shown that Fed is reactive

At this moment, Fed does not have a road map

Fed every month send out a survey to wall street fund managers

To see if Market (wall street) has digested what Fed want them to believe

Fed is not going to tell you I am going to hike rates in Mar, Jun, Sep, Dec

No, they will hint you and they will hint you that's what they are going to do and see if market will take the hint

There's no such thing as roadmap

And it's dynamic and can be changed say 6 months from now

At this point shortterm bond futures market has accepted that

That's consensus

That's what Fed wants you to believe

Not actual action they are taking now

One side of the story

Pretty much what short term bond market consus

4 interest rate hike this year and likely reduce balance sheet at 60-80 b per month

120b not possible, as one of the President of local Fed Reserve, St. Louis, bluffed

They don't have that much for redemption

The mild way if reducing balance sheet is at maturity, redeem, and don't buy new bonds

Of course Fed can sell bonds to make 120b

But this will be considered very hawkish, drastic

Not likely

So hike rates 4 times this year

Another 3-4 times down the road

Even you bring it to 3%

You still have negative real interest rate

有用吗？

有用有没有用

没有

没有用的地方是如果inflation是prolonged, 没啥用

如果是transitory, 会自然消失，加不加，no difference

有用的地方，politicians最care的是get reelected

As long as I am figuring inflation, even if it's still high, but trending, voters will buy it

有用也好，无用也罢

但是这个加息一定会造成金融资产repricing

That's what we see on 10-year treasury yield and everything else

Is repricing done?

Not likely

As bond investors are much more sophisticated than equity investors

Especially those 25 million who newly opened rh accounts in 2020 and 2021

That are all the things of 1 side of the coin

Let's talk about the other side of the coin

Is Fed going to raise 50 basis points in March as Bill Ackman suggested?

Not likely, I believe Bill has large short positions

Or raise interest rate to 2.5% 一步到位？

Very unlikely

像Paul Volcker, 一夜加到18%

Impossible, 那个时候Debt just thousands billion

现在几十个trillion

排除这些极端情况

一种可能就是Fed 还没加息了，stock market自己调整，挤掉20%的水分

Fed可能还是乐于看到这点的

从那种角度来看，股市都是虚火的

挤掉一点泡沫是好事

就像挤奶

关键是不能把牛挤病了，更不能挤死了

所以比较可能的是2015的情况

尽管充分的沟通，市场理解了Fed的意图

有turbulence, 但是无损经济

也可能市场对Fed理解有偏差，或者Fed沟通不良，就是2018

但是2018也不是世界末日

20% correction可以接受

这次equity market比较混乱的原因，是market 没有意识到Fed talking about reducing balance sheet

我说个了，Fed只能hint, 不能给road map

第一点Fed 没有啥3年roadmap

第二点，公布了，就没有调整余地

第三点，造成市场套利机会

对equity market, 是2015， 2018的情况，是最好的

如果是慢慢的跌，不是明天跌去20%，温水煮青蛙，是ideal

那会不会2020 once more

除非有catalyst，一个黑天鹅事件

是不是可能像俄国入侵乌克兰这样的事件

这个最多是灰犀牛

而且如果covid becomes endemic

那么supply chain的情况有所缓解

如果inflation落到3%以下，市场反应就更不会非常强烈

所以this side of the coin的派别认为，就是2015的情况

真的加了一次息以后，市场反而平稳了

所以这是2 sides of the coin

asked: 那现在是不是应该持现金等机会？还是继续买房抗通胀？

1 negative carry on cash

2 opportunity and risk of deploying your cash

Don't get me wrong, not one would suggest you to hold cash forever...

 

.... to be continued...