Xu Yi Li: What Is The Power To Make The Stock Market Crazy?

The turning point of nature is in the 2500 point, when the corresponding event is to cut interest rates. The power of madness stems from the interest rate cut.

Is it true that this rate cut really gives the stock market such a big power? The management has made it clear that the interest rate cut does not mean that the monetary policy is turning. Is the market overlooking the interest rate cut?

To put it this way, monetary policy has not yet begun to relax, which may be good. But do you want to relax later? This is not what the central bank wants. It is the economy itself. Looking at the general direction, the interest rate of the renminbi will inevitably enter a new downward path. If we do not admit it, the next monetary policy is bound to be loose. For the stock market, it is clear that such an expectation will naturally bring strength to the stock market.

The following is a specific analysis of this expectation.

From the common sense, the ultra expected rate cut operation a week ago really confused the market.

Some people say that the interest rate cut is naturally because the market is too dry, and the central bank is pumping water to fight drought. At least two evidence supports this view:

1, before that, the number of deposits in China's commercial banks showed no signs of reduction. Banks were short of money.

2, a few days before the interest rate cut, the bank just came out of a shortage of money, many people pointed out that the interest rate cut directly to this reason.

But to the present information we know, there are problems with these two evidences.

The first thing to do is to cut interest rates to hedge against this shortage of money? Obviously not!

Just before last Friday, before the central bank cut interest rates, the senior executives on Wednesday expressed support for the financing of small and medium-sized enterprises. It is said that a bank can not borrow money in the same industry, which leads to the fact that it can not be liquidated in the day's liquidation, and the transaction of the entire banking system is delayed for half an hour.

Some people say that the shortage of money on Thursday is the key to the central bank's interest rate cut. Later, it was clear that it was not even a fuse. In fact, it was rather boring. On Thursday, the unfortunate bank failed to dismantle the loan. In fact, it was largely due to the fact that domestic banks were preparing for the next week's subscription of new shares. As a result, there is a short-term liquidity strain on the capital side, which is not even known as a vicious event. The reason why such a situation is seldom seen before is the special background of the times.

Perhaps the news is getting more and more informed, and the operation of the financial industry is becoming more and more convergent. The lack of rival discs makes the financial system extremely prone to extremes. Especially since the beginning of this year. High yield The background undoubtedly strengthened this bias factor, and finally became the root of the short money shortage.

Of course, the central bank is not afraid of the shortage of money. The SLO that started last year is the central bank in order to solve this short-term money wasted. So on Friday, the central bank released 50 billion of its funds through SLO. This SLO is designed to deal with short-term liquidity problems, but it can not solve the long-term financial problems. The money that banks take from the central bank is to be paid back, which will have essential differences.

Those second things, where are the deposits of commercial banks? Are interest rates cut for hedging without money?

Since the beginning of this year, the financing volume of the whole society is a big problem. Behind the shrinking, the commercial banks have shown an innocent face of "no money, how to lend". This makes the whole society very nervous, and all kinds of speculation about "where to go?"

What many people can't guess is that deposits have not gone anywhere, but a "secret war" between commercial banks and regulators has been staged. What do you mean by that? We should know that the foreign banking industry will also reduce the loan volume in the tightening cycle, especially now it is a bit tight. People say clearly that they are rich, but they are reluctant to lend money because of financial security considerations. At that time, foreign central banks often used various seductive policies in order to stimulate bank loans. All this, in China, will change the market mode. On the one hand, on the one hand, you have to lend money when you want to lend money, because you are a state-owned enterprise and do not obey. On the other hand, after the loan is released, the examination is still following the market. It also lets people not play, so commercial banks have evolved a way of credit crunch in this policy environment.

Why are commercial banks reluctant to lend money to society? Because this year's fiscal policy investment is still huge. Although we have not heard of trillions of investment by the government, we have seen that large-scale projects such as high speed rail, nuclear power, UHV, water conservancy and environmental protection have not slowed down, and agencies have been using a word "structural big investment" to describe the current economic situation. This involves a problem. Since the projects supported by the state have not entered the state of scarcity, it is not necessary for the commercial banks that are able to have enough food and clothing to bite the bones of the small and medium-sized enterprises.

Siphon effect of financial projects has become a key issue to curb SME financing. Against this background, commercial banks will not be able to think about how to lend to SMEs if they are not on the edge of starvation. How to do it?

So, while doing shadow banking, he said there was no money. Of course, the central bank is not stupid, so on Wednesday's policy, it put forward a brilliant policy to promote financing, but it contained a very destructive one. Non interbank deposits were regarded as deposits. That is to say, the funds of the table also require you to pay the reserve. The whole commercial banking system should pay two trillion more reserves. The commercial banks were panic, so there was a Thursday. Bank Borrow money but can't borrow it.

In the final analysis, China's banking industry is not at all lacking in money, but rather unwilling to lend. If the real banks are short of money, then the central bank's operation is first to reduce the rate and not to cut interest rates. The advantage of this interest rate cut is that on the one hand, the mouth of commercial banks is blocked, and on the other hand, it gives confidence to the real economy that needs capital. This is the key to lowering the financing cost of the whole society.

In this game, the central bank has not lowered its quota, and has not changed the loan to deposit ratio. It is equal to allowing market funds to save themselves, rather than inject capital into the market from the "frozen capital". In fact, it has reduced the negative effects brought by the overall easing to a minimum. And the real central bank simply gave commercial banks an asymmetrical interest rate cut.

We can basically see the current round. Rate cut One of the true colors of market confidence, which includes two aspects: commercial banks and real economy.

So many people say that China's interest rate cut has not changed the direction of monetary policy. With the habit of the central bank, interest rate cuts and interest rates will not be a one-off event. This is a human factor. More importantly, China really needs to cut interest rates to reduce the financing cost of the whole society, so as to uplift economic activity and stimulate the willingness of commercial banks to lend.

No one can change it, including the central bank.