The Global Market Has Entered The Era Of Negative Interest Rates.

Beijing time on February 11th, the US Standard & Poor's 500 index reached the lowest level in two years. The main indexes of the three major stock markets in Britain and Germany were all down more than 5%. The Japanese stock market fell 11.1% a week, the biggest weekly decline since the financial crisis in 2008.

In February 12th, the European index rose and the US Standard & Poor's 500 rose. Asian market indexes in Japan, South Korea, Hongkong and China still fell, and the KOSDAQ index dropped sharply by 8.2%, triggering the first level threshold of 8% of the Korean stock fugition mechanism and suspending the paction for 20 minutes.

The price of treasury bonds in the US and Japan is very high. The yield of the ten - year treasury bonds has dropped to an unprecedented low level. Gold is thriving. Investors seem to be able to fall asleep with gold in their arms. The risk aversion reaches its peak.

This is because A shares are on vacation. Is there no room for strength? Of course not.

Instead of the global negative interest rate, asset prices are revalued.

During the Spring Festival, the governor of the Central Bank of China and the United States gave speeches respectively.

In February 10th, Ms. Yellen published the semi annual monetary policy testimony, emphasizing the incremental interest rate path, and thought that the recent financial support for economic growth declined, the stock market fell, the higher the borrowers' borrowing costs and the further appreciation of the dollar.

Yellen said that when the negative interest rate had to be implemented, nothing seemed to prevent the Federal Reserve from taking this action.

And the governor of the Central Bank of China interviewed in addition to indirectly warning the bears, he also made it clear that the central bank's main task is stability. "We will not let speculative forces dominate the market sentiment."

Judging from the central bank's actions since January, the proportion of dealing with speculation is even greater.

In the past two years, the Central Bank of China has been committed to reducing the cost of financing.

Despite entering the era of negative interest rates, the Bank of Japan is clearly unwilling to bear the accusation of causing financial market turmoil. Its president, Kuroda Higashihiko, said the stock market turbulence was caused by investors' excessive risk aversion, not because of negative interest rates implemented by the central bank.

In February 11th, the Swedish central bank also announced that the benchmark interest rate, which has already been negative, will be reduced by 0.15 percentage points to -0.50% from February 17th.

The ECB policy meeting in March is likely to cut interest rates again.

The two major means to restore economic health are to the utmost.

Using quantitative easing to stimulate the real economy has proved to be impracticable, and the release of money has failed to stimulate the real economy.

The level of corporate asset profitability is decreasing, which means that

Enter the revaluation process.

The S & P 500 index ROE dropped from 15.2 in October 2014 to 12.6 in December 2015. This is also the fundamental reason for Buffett's failure to run the index in two years, not because Buffett failed, but the continued decline in asset yield, resulting in a revaluation of the value of manufacturing and service industries.

Now, more and more central banks are using negative interest rates to re evaluate the prices of various products.

Overall, the future shocks will be greater and earnings will decline further.

After the subprime mortgage crisis loosened the currency, asset price revaluation was basically divided into three steps.

The first step is the differentiation of enterprises, the profits of some profitable and story companies, and the failure of traditional industries and enterprises without reorganizing stories.

The second step is to look for new industry leaders.

Until these enterprises fail to carry.

In 2015, US technology stocks performed well, typically "Fang" - Facebook, Amazon, Netflix and Google.

In January this year, influential analysts warned that the short-term volatility of the market is a little strange, mainly because of the collapse of the "macro dynamic bubble". The negative feedback cycle has come to the surface. This will bring great risks to the S & P 500, and the prices of commodities such as commodities have reached a new low. While some other assets (high tech stocks) are at a historically high level, this is the performance bubble, the macro dynamic bubble.

Now the market is looking for reasons to see some hi-tech stocks.

The third step is to eliminate.

Financial groups whose strength is not good, these groups used to rely mainly on levers and rely on high interest rates to earn their living. This golden age has ended.

In China, some Internet Finance and private fund-raising have fallen, while hedge funds are losing money internationally.

Li Huan has an article that, after the subprime mortgage crisis, the total ROE of A share listed banks basically remained above 16% - this is achieved in the context of the real asset returns.

Over the past few years, the financial market has essentially been making money in raising assets turnover and raising leverage. Asset turnover has improved positively in the primary market of stocks and bonds, and the two level market is improving leverage.

But with the decline in asset turnover, exposure to high leverage risk and declining earnings, the good days of banks are over.

Internationally, the S & P 500 financial sector has fallen 18% this year, the worst performing sector in 2016.

The jump in credit default swap (CDS) for senior banks and banks in the euro zone suggests that the performance of euro zone banks is worse than that of the overall bond market.

The return on assets of most enterprises will not be improved due to the negative interest rates of major global central banks. Companies with capital can raise their share prices through repurchase and acquisition. For most companies, the increase of leverage means that the "barrier lake" will be raised. In 2016, it may be "mud warfare" in the "mire".