China'S M2 Money Supply In February Was 13.3%

In February, China added RMB 726 billion 600 million yuan, which was expected to be 1 trillion and 200 billion yuan, with a value of 2 trillion and 510 billion yuan.

China's scale of social financing in February was 780 billion 200 million yuan, and it was expected to be 1 trillion and 850 billion yuan, with a value of 3 trillion and 420 billion yuan.

China's M2 supply in February was 13.3% compared with 13.7% in the previous year, with a value of 14%.

Comment:

1) the core point of view: credit and social harmony have dropped sharply, the economy has strongly stimulated falsification, and the cycle of recovery has been disillusioned.

The strong stimulus of the economy must see the sustained and rapid credit release (such as the first half of 2009), but in February, the credit cooperatives fell sharply, and the economic stimulus was falsified. This shows that 2 trillion and 510 billion of the credit volume in January is mainly driven by the early benefits, the debt to the US dollar, the rolling of Pang's financing, the steady growth of the rail pportation, and the booming real estate sales of the second tier core cities.

After the completion of the replenishment, periodic demand for steel, iron ore and other cyclical products is short of investment demand. The replacement is faced with the pressure of overcapacity resumption and price adjustment, and the cycle recovery is disillusioned. In February, PMI and exports were lower than expected.

It is recommended that we should take "recuperate" as the main source of the market, and recommend the gold and metropolis satellite city housing market. We should pay attention to asset securitization, reform of state-owned enterprises, a new round of housing market regulation, second tier housing market and rail traffic overweight.

2) credit is much lower than expected, and falsification is a strong stimulus.

Commercial housing sales are booming, residents' long-term credit increased by 182 billion yuan, or less than 4 billion 400 million yuan.

The capital reserve project was concentrated in the beginning of the year, and the medium and long-term credit increased by 502 billion 200 million yuan, or 1 billion 400 million yuan less than that of the previous year.

Note financing decreased by 58 billion 300 million yuan, which is related to strengthening supervision.

The short-term credit of the residents was reduced by 211 billion yuan over the same period, and the demand for the purchase of the house was squeezed by the consumption demand.

Short term loans for enterprises decreased by 16 billion 300 million yuan over the same period last year.

In the stock market adjustment, loans from non banking financial institutions decreased by 72 billion 200 million yuan.

3) the total amount of financing is much lower than expected.

The total volume of financing grew by 11.91% over the same period last year, down 0.55 percentage points from last month.

The proportion of credit in the table rose significantly, of which RMB credit increased by less than 333 billion 200 million yuan a year; RMB depreciated against the US dollar; enterprises continued to go to the US dollar debt, and foreign currency loans decreased by more than 42 billion 300 million yuan over the same period last year.

The decrease in off balance sheet credit is mainly related to a sharp decline in the strict acceptance of bills of exchange.

Among them, entrusted loans increased by 35 billion 100 million yuan over the same period, and trust loans increased by 27 billion yuan over the same period last year, and the acceptance bills were reduced by 311 billion 500 million yuan over the same period.

The amount of direct financing is higher than that of Qisheng, corporate bonds increased by 15 billion 100 million yuan over the same period last year, and stock financing increased by 26 billion 800 million yuan compared with the same period last year.

4) monetary growth is slightly lower than market expectations, which is related to the sharp fall in new credit.

M2's growth rate was 13.3%, down from 0.7 percentage points at the end of last month, but still higher than 13% in 15.

The market liquidity is ample. In February, the open market operation returned 310 billion 500 million yuan net. The weighted average interest rate of the interbank lending was 2.09%, 0.02 percentage points lower than last month, 1.55 percentage points lower than the same period in 2015.

Fiscal savings decreased by 169 billion, indicating steady growth continued to exert force.

The savings of enterprises will be reduced by 1 trillion and 480 billion yuan, which may be affected by the Spring Festival.

M1 grew by 17.4% over the same period last year, which is related to the decrease in corporate deposits.

Non bank deposits increased by 775 billion 900 million yuan over the same period last year.

5) where is the money: asset bubble is greater than stagflation risk.

The gap between the broad money supply and nominal GDP growth has been constantly widen, and the excess money has not entered the real economy and has fallen into the liquidity trap.

Where did the money go? Maybe on the one hand is to maintain the debt cycle and Pang's financing rolling, and the accumulation of funds leads to a decline in the speed of money circulation. On the other hand, it has pushed up the stock market bubble, and once again shows that the current structural and institutional problems are difficult to solve through the total demand management policy, and reform is the only way out.

Recently, the prices of bulk and cyclical commodities have gone up, and stagflation is expected to rise again.

The excess money naturally chases the commodities that supply elasticity and small demand and elasticity.

Considering that the output gap, serious excess capacity and insufficient demand will restrict the pmission of money to PPI and CPI. The impact of over developed currencies on asset bubbles will be far greater than the risk of stagflation.

The CPI rebound in February was mainly affected by seasonal and short-term weather factors.

In economic history, the two stagflation in 70 and 80s was mainly related to the oil crisis. During the recession, over money generally pushed up the stock market bubble instead of pushing up CPI, PPI and so on, which is why the world is in the world.

Plagued by QE and even negative interest rates.

Ultra developed currency

The housing bubble absorbed but did not flow into the real economy, so it did not pmit to CPI, PPI and so on.

6) periodic disillusionment.

Recently, due to excessive currency growth, strong economic stimulus expectations, demand for replenishment, spring preparation, and heavy industry shutdowns during the two sessions, steel, iron ore and other commodities have been continuously squeezes, and prices of copper, coke and other means of production have risen.

After the time window, along with the strong economic stimulus, falsification (rail pit can cause commercial development is expected to increase, but the underground pipeline network, shantytowns pformation and other local initiatives are low), the first tier housing market is in a new round of regulation and control, the three or four line depot pressure is high (three or four lines occupy 80% of the real estate investment), investment demand can not keep up after the short replenishment demand, the resumption of work after the two sessions, and the serious excess capacity of the traditional industries may revive, and the prices of major cyclical products are facing the pressure of callback.

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It is expected that the prices of major cyclical products may be divided in the future. The prices of steel, iron ore and coal, which are mainly supported by investment demand, are facing a sharp adjustment pressure. The price of gold and other financial attributes will continue to rise by the increase of European China's premium, and the impact of crude oil on the border will be greater.

In the early days, we proposed that we should "recuperate and regenerate". We recommend that we should hold together the undervalued sector, recommend gold, bulk and real estate. With the "stimulus falsification, periodic disillusionment", steel, iron ore, coal and other prices are short of demand support, we are faced with the pressure of callback. We will continue to recommend the gold and megalopolis satellite city housing market, focusing on asset securitization, state-owned enterprise reform, a new round of housing market regulation, second tier housing market and rail traffic overweight.

7) during the shift period, we put forward the macro framework of pformation to distinguish between the traditional "macro cycle" framework and the next 3-5 years' economic L type.

Before the capacity leveraging and supply side reform is completed, the economy will continue to adjust at the bottom and there will be no economic recovery.

China's economy is at the crossroads of history, and public policy is facing major choices.

Reform will usher in the dawn; stimulus will speed up the crisis.

From the preparation of the plan to the landing, we will face the sea and bloom in spring.

I'll be waiting for you in spring.