Xu Yili: Where Does The Power To Drive The Stock Market Crazy Come From?

The essential turning point was 2500, and the corresponding event was interest rate reduction. The power of madness originates from interest rate reduction.

But does the interest rate cut really give the stock market such great power? The management has made it clear that this interest rate cut does not represent a shift in monetary policy. Is it because the market has over interpreted this interest rate cut?

In this view, it may be good that monetary policy has not yet begun to relax. But whether to relax in the future is not a matter of what the central bank wants, it is determined by the economy itself. From a general perspective, the RMB interest rate will inevitably enter a new channel of decline. Whether it is admitted or not, the next monetary policy is bound to be loose. For the stock market, such a clear expectation naturally brings crazy power to the stock market.

The following is a detailed analysis of this expectation.

From a common sense, the market was really puzzled by the unexpected interest rate cut a week ago.

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

1. Before that, the deposits of China's commercial banks showed the unique signs of reduction, and the banks were short of money.

2. A few days before the interest rate cut, the bank had just had a shortage of money, and many people pointed to this reason directly.

But as far as we know, there are problems with both evidences.

First, is the interest rate cut to hedge against this money shortage? Obviously not!

Just before the central bank cut the interest rate last Friday, the senior management made a statement on Wednesday to support the financing of small and medium-sized enterprises. As a result, on Thursday, the market was strangely short of money. It is said that a bank could not borrow money from its peers, which led to its inability to settle in the clearing of the day, and the transaction of the entire banking system was forced to be postponed for half an hour.

Some people said that the money shortage on Thursday was the key to the central bank's interest rate cut. It was later made clear that this was not even the trigger. In fact, it was quite boring. The reason why the unlucky bank could not lend funds on Thursday was that the domestic banks were preparing to make a big show of their new share purchase at that time. As a result, short-term liquidity tension has occurred on the capital side, which is not even a malignant event in fact. The reason why similar situations rarely appeared before is also due to the current special background of the times.

It may be that you are getting more informed, and the operation in the financial industry is becoming more and more similar - you are preparing for the new at the same time, and you are preparing for the liquidity test at the same time. The lack of rivals makes the whole financial system vulnerable to extreme phenomena. Especially since this year High yield The background undoubtedly strengthened this biased factor and eventually became the root cause of the short-term money shortage.

Of course, the central bank is not afraid of money shortage. The SLO started last year is the central bank to solve this kind of short-term money waste. So on Friday, the central bank released 50 billion yuan through SLO. This SLO is designed to deal with short-term liquidity problems, but it can not solve long-term capital problems. The money that the bank takes from the central bank is to be repaid, and there is an essential difference between the deposit reserve and the deposit reserve.

The second thing is, where have all the deposits in commercial banks gone? Is the interest rate cut to hedge the lack of money to lend?

Since this year, the financing amount of the whole society has been a big problem. Behind the continuous shrinking, commercial banks have shown an innocent face of "how can I borrow without money?". This makes the whole society very nervous, and all kinds of speculation about "where is the deposit going?" is heating up.

What many people can't guess is that the deposit has not gone anywhere, which is nothing more than a "secret war" between commercial banks and regulators. What do you mean? You should know that foreign banks will also reduce their loan amount in the tightening cycle, especially now it is a bit tight. They clearly said that they had money but were reluctant to lend because of financial security concerns. At this time, in order to stimulate bank loans, foreign central banks often resort to various seductive policies. In China, the market-oriented model will change. On the one hand, you have to lend because you are a state-owned enterprise and will leave if you don't obey; On the other hand, the assessment after the loan is released still follows the marketization (the bad debt will also leave). Does this make people play? Therefore, under this policy environment, commercial banks have evolved a way of loan sparing - off balance sheet assets.

Why are commercial banks unwilling to lend to the society? Because the fiscal policy investment this year is still huge, although we have not heard that the government has invested several trillion yuan, we have seen that the large projects lacking high-speed railway, nuclear power, ultra-high voltage, water conservancy, environmental protection and other projects have not actually slowed down. Some institutions have been using the word "large structural investment" to describe the current economic state. This involves a problem. Since the projects supported by the state have not entered a state of scarcity, it is unnecessary and unwilling for commercial banks with enough food and clothing to gnaw at the bones of SMEs.

The siphon effect of financial projects has become the key problem to restrain the financing of SMEs. In this context, it is impossible for commercial banks to think about how to lend to SMEs without starving to death, and the funds left behind cannot be left to regulators to find trouble. What should I do? Make a list.

So, while doing shadow banking, he said he had no money. Of course, the central bank is not stupid, so on Wednesday, it put forward a bright and good policy to promote financing, but there is a killer hidden in it. All non interbank deposits are deposits. That is to say, you should also pay the reserve fund for the capital in the statement, and the entire commercial banking system should pay an additional 2 trillion yuan of reserve fund. Now the commercial bank panicked, so there was Thursday bank The scene of borrowing money but not borrowing it.

In the final analysis, China's banking industry is not lack of money, but unwilling to lend. If the banks are really short of money, then the central bank's operation should first be to reduce the reserve ratio rather than the interest rate. The advantage of this interest rate cut is that on the one hand, it has blocked the mouth of commercial banks, on the other hand, it has given confidence to the real economy in need of funds. The key is to reduce the financing cost of the whole society.

In this game, the central bank did not reduce the reserve ratio or change the deposit to loan ratio, which is equivalent to letting market funds save themselves, rather than injecting capital into the market from "frozen funds". In fact, this is to minimize the negative effects of comprehensive easing. In fact, the central bank has only cut interest rates asymmetrically for commercial banks.

We can basically see that this round Cut interest rate One of the true features of the Bank is to give the market confidence, which includes both commercial banks and the real economy.

So many people say that China's current round of interest rate cuts has not changed the direction of monetary policy. In the habit of the central bank, interest rate cuts and increases will not be a one-time event, which is a human factor. What is more essential is that China really needs to reduce the financing cost of the whole society by cutting interest rates, so as to increase economic activity and stimulate the willingness of commercial banks to lend.

No one can change this, including the central bank.