The Financial Industry Is Overblown And The Economy Is Completely Cleared Until 2019.

European and Korean stock markets are new.

After the US stock hit a new high, stock markets in Germany and South Korea hit a record high last week.

In fact, this year's European stock market performance is particularly outstanding, Germany, France, Italy, Spain, Holland and other stock market generally rose more than 10%.

The 1 quarter euro area GDP growth rate of 0.5% has been announced in the near future. It has picked up for 3 consecutive quarters, and the recovery has been pressing on the US. At the end of 4, the euro area CPI also rebounded to a five year high of 1.9%.

It's a shave Europe! Watching other people's stock market get high, we can't help comparing it.

A shares are less than US stocks. After all, the United States has tax cuts, immigrants and innovation.

But compared to Europe, it is a bit of a mystery.

The alliance has no unified fiscal policy and can not afford fiscal incentives such as tax cuts; and the population is Islamizing and the political group is going to be scattered, so that the economy can still get better and the stock market can also rise. The nature of the European debt crisis and the excessive development of shadow banking have changed the European banks into omniscent banks before the financial crisis. They have turned from commercial banks to investment banking businesses, while investment banking business is similar to shadow banking. Their development relies on high leverage, resulting in excessive capital flows to high-risk industries and regions, such as Greece, and real estate in Italy, Spain and other countries, which has led to a false prosperity in European economies, and real estate bubbles in Italy, Spain and many other countries. Over the past few years, we have been making global macroeconomic analysis, which has generally knocked Europe off, saying that Europe is doomed to no hope, and that the euro area is only a currency.

But shadow

Money making is easy to lose money and fast. With the outbreak of the subprime crisis, European banking industry suffered heavy losses, forced to shrink credit and drag down economic development.

What is Europe doing? What is the financial leverage? In our view, the power to make Europe pick up comes from financial leverage, that is, the rebirth of the financial industry.

After the crisis, the European authorities strengthened financial supervision and substantially increased the capital adequacy requirement, forcing the investment banking business which was dependent on capital leverage to be severely constrained, forcing European banks to pform to traditional commercial banks, including Deutsche Bank, Barclays Bank and Swiss credit bank in the past few years, shrinking investment banking business and developing retail business, which means that the banking industry in Europe has also experienced a painful process. However, since the beginning of last year, the credit growth rate of European banking industry has gradually improved, indicating that the financial sector has begun to really serve the economic development.

The outbreak of the subprime mortgage crisis in the United States is also the overdevelopment of investment banks, resulting in excessive capital flow to real estate. After the crisis, many investment banks were incorporated into commercial banks or pformed into commercial banks, and the economy gradually recovered after financial deleveraging.

The essence of China's asset bubble and its excessive financial prosperity are the similarities between China and the US and Europe before the crisis.

In the past 16 years, the growth of China's banking assets has reached 16%, while the growth rate of traditional commercial banking loans is only about 11%. This shows that the rapid growth of China's banking industry is the investment banking business represented by interbank business.

From the perspective of the whole asset management industry, the assets growth rate of brokers in 16 years is as high as 50%, and the growth rate of insurance and trust assets is as high as 24%. The growth rate of all these sub sectors is far beyond the M2 target growth rate of 13%, which is far more than that of the 7% GDP and 3% CPI development goals.

As a result, the banking industry alone added 30 trillion of its assets last year, equivalent to 30 trillion of its currency creation, while GDP only increased by 5 trillion and 500 billion. Obviously, the financial industry created too much money and mainly went to high-risk areas such as real estate and financing platforms.

current

This year, the central bank has begun to strengthen the macro prudential supervision of MPA assessment. Since March, the CBRC has released 8 gold medals. Recently, the SFC has begun to supervise the pool of securities dealers. Its essence is to pull financial institutions out of the runaway development.

Over the past few years, many small and medium-sized banks, insurance, securities and trust companies are expanding at a rate of over 50%, which is a huge risk for China's economy as a whole, and is also the focus of current regulation.

The traditional commercial banks are constrained by capital adequacy ratio and deposit reserve ratio, so it is impossible to develop at a high speed. Therefore, the key point of regulation is to constrain the development of investment banks, especially to avoid the supervision of financial interbank business, to reduce the leverage of the financial industry, and to return the excess money, forcing the development of the financial industry to return to the real economy.

We can see that China's stock market is still halfway up, because our financial industry has been over prosperous and distorted the allocation of funds.

Looking back over the past few years, we have launched a vigorous interest rate marketization. The purpose is to raise interest rates from the market to raise the allocation efficiency of resources, but the result is just the opposite. Prudently operating large banks and big insurance are getting smaller and smaller, but countless small banks and small insurance companies are getting bigger and bigger. But the magic weapon is to borrow money at high interest rates. In order to repay the high interest cost, its capital flows to high-risk areas, including 15 years of stock market and 16 years of housing market.

Why are there universal insurance and interbank deposit certificates abroad?

However, it is rare to hear that insurance and banks can rely on high interest rates to raise their debts. The reason is that foreign financial institutions have the risk of bankruptcy, so the higher the universal insurance and certificates of deposit, the more they dare not buy.

But in China, because we believe that financial institutions will not go bankrupt and endorsed by the government, the smaller the insurance, the higher the interest rate of banks, the better the sale of interbank certificates.

It can be seen that the key to China's economic pformation lies in the effective allocation of resources in financial markets. The key is to break the rigid spell of financial institutions, only to create a bubble of financial institutions that have no value at all. We must let some financial institutions run out of control fail, so that everyone will learn lessons and return to the essence of the financial industry and serve the real economy.

In the process of financial deleveraging, there will be short-term labor pains, such as falling asset prices, the closure of financial institutions and so on. However, it will remain intact. Only in this way can China's economy break through the cocoon and rebirth, and China's capital market will have long-term hope.

For more information, please pay attention to the world clothing shoes and hats and Internet cafes.