at this point, I presented 1 side of the coin, I have presented to you another side of the coin.
And the prediction of any kind on Fed, market movement is a fool's errands
History has shown that Fed is reactive
At this moment, Fed does not have a road map
Fed every month send out a survey to wall street fund managers
To see if Market (wall street) has digested what Fed want them to believe
Fed is not going to tell you I am going to hike rates in Mar, Jun, Sep, Dec
No, they will hint you and they will hint you that's what they are going to do and see if market will take the hint
There's no such thing as roadmap
And it's dynamic and can be changed say 6 months from now
At this point shortterm bond futures market has accepted that
That's consensus
That's what Fed wants you to believe
Not actual action they are taking now
One side of the story
Pretty much what short term bond market consus
4 interest rate hike this year and likely reduce balance sheet at 60-80 b per month
120b not possible, as one of the President of local Fed Reserve, St. Louis, bluffed
They don't have that much for redemption
The mild way if reducing balance sheet is at maturity, redeem, and don't buy new bonds
Of course Fed can sell bonds to make 120b
But this will be considered very hawkish, drastic
Not likely
So hike rates 4 times this year
Another 3-4 times down the road
Even you bring it to 3%
You still have negative real interest rate
有用吗？
有用有没有用
没有
没有用的地方是如果inflation是prolonged, 没啥用
如果是transitory, 会自然消失，加不加，no difference
有用的地方，politicians最care的是get reelected
As long as I am figuring inflation, even if it's still high, but trending, voters will buy it
有用也好，无用也罢
但是这个加息一定会造成金融资产repricing
That's what we see on 10-year treasury yield and everything else
Is repricing done?
As bond investors are much more sophisticated than equity investors
Especially those 25 million who newly opened rh accounts in 2020 and 2021
That are all the things of 1 side of the coin
Let's talk about the other side of the coin
Is Fed going to raise 50 basis points in March as Bill Ackman suggested?
Not likely, I believe Bill has large short positions
Or raise interest rate to 2.5% 一步到位？
Very unlikely
像Paul Volcker, 一夜加到18%
Impossible, 那个时候Debt just thousands billion
现在几十个trillion
排除这些极端情况
一种可能就是Fed 还没加息了，stock market自己调整，挤掉20%的水分
Fed可能还是乐于看到这点的
从那种角度来看，股市都是虚火的
挤掉一点泡沫是好事
就像挤奶
关键是不能把牛挤病了，更不能挤死了
所以比较可能的是2015的情况
尽管充分的沟通，市场理解了Fed的意图
有turbulence, 但是无损经济
也可能市场对Fed理解有偏差，或者Fed沟通不良，就是2018
但是2018也不是世界末日
20% correction可以接受
这次equity market比较混乱的原因，是market 没有意识到Fed talking about reducing balance sheet
我说个了，Fed只能hint, 不能给road map
第一点Fed 没有啥3年roadmap
第二点，公布了，就没有调整余地
第三点，造成市场套利机会
对equity market, 是2015， 2018的情况，是最好的
如果是慢慢的跌，不是明天跌去20%，温水煮青蛙，是ideal
那会不会2020 once more
除非有catalyst，一个黑天鹅事件
是不是可能像俄国入侵乌克兰这样的事件
这个最多是灰犀牛
而且如果covid becomes endemic
那么supply chain的情况有所缓解
如果inflation落到3%以下，市场反应就更不会非常强烈
所以this side of the coin的派别认为，就是2015的情况
真的加了一次息以后，市场反而平稳了
所以这是2 sides of the coin
asked: 那现在是不是应该持现金等机会？还是继续买房抗通胀？
1 negative carry on cash
2 opportunity and risk of deploying your cash
Don't get me wrong, not one would suggest you to hold cash forever...
.... to be continued...
现在是个中国人都是地主，地主是那么好当的吗？租金跌一半时，你还能挺住才够格吧？
看了我都不知道说啥
ride real estate through the interest noise.
Stock market crash will eventually spread into real estate. And with the leverage in RE, the pain could be bigger for some people who chased red hot market.
坛子里信息你们那儿能每个人那么多贷款。很多都贷到顶，我一边看的都倒吸口凉气，这么大的leverage风险太大了。。
at this point, I presented 1 side of the coin, I have presented to you another side of the coin.
And the prediction of any kind on Fed, market movement is a fool's errands
History has shown that Fed is reactive
At this moment, Fed does not have a road map
Fed every month send out a survey to wall street fund managers
To see if Market (wall street) has digested what Fed want them to believe
Fed is not going to tell you I am going to hike rates in Mar, Jun, Sep, Dec
No, they will hint you and they will hint you that's what they are going to do and see if market will take the hint
There's no such thing as roadmap
And it's dynamic and can be changed say 6 months from now
At this point shortterm bond futures market has accepted that
That's consensus
That's what Fed wants you to believe
Not actual action they are taking now
One side of the story
Pretty much what short term bond market consus
4 interest rate hike this year and likely reduce balance sheet at 60-80 b per month
120b not possible, as one of the President of local Fed Reserve, St. Louis, bluffed
They don't have that much for redemption
The mild way if reducing balance sheet is at maturity, redeem, and don't buy new bonds
Of course Fed can sell bonds to make 120b
But this will be considered very hawkish, drastic
Not likely
So hike rates 4 times this year
Another 3-4 times down the road
Even you bring it to 3%
You still have negative real interest rate
有用吗？
有用有没有用
没有
没有用的地方是如果inflation是prolonged, 没啥用
如果是transitory, 会自然消失，加不加，no difference
有用的地方，politicians最care的是get reelected
As long as I am figuring inflation, even if it's still high, but trending, voters will buy it
有用也好，无用也罢
但是这个加息一定会造成金融资产repricing
That's what we see on 10-year treasury yield and everything else
Is repricing done?
Not likely
As bond investors are much more sophisticated than equity investors
Especially those 25 million who newly opened rh accounts in 2020 and 2021
That are all the things of 1 side of the coin
Let's talk about the other side of the coin
Is Fed going to raise 50 basis points in March as Bill Ackman suggested?
Not likely, I believe Bill has large short positions
Or raise interest rate to 2.5% 一步到位？
Very unlikely
像Paul Volcker, 一夜加到18%
Impossible, 那个时候Debt just thousands billion
现在几十个trillion
排除这些极端情况
一种可能就是Fed 还没加息了，stock market自己调整，挤掉20%的水分
Fed可能还是乐于看到这点的
从那种角度来看，股市都是虚火的
挤掉一点泡沫是好事
就像挤奶
关键是不能把牛挤病了，更不能挤死了
所以比较可能的是2015的情况
尽管充分的沟通，市场理解了Fed的意图
有turbulence, 但是无损经济
也可能市场对Fed理解有偏差，或者Fed沟通不良，就是2018
但是2018也不是世界末日
20% correction可以接受
这次equity market比较混乱的原因，是market 没有意识到Fed talking about reducing balance sheet
我说个了，Fed只能hint, 不能给road map
第一点Fed 没有啥3年roadmap
第二点，公布了，就没有调整余地
第三点，造成市场套利机会
对equity market, 是2015， 2018的情况，是最好的
如果是慢慢的跌，不是明天跌去20%，温水煮青蛙，是ideal
那会不会2020 once more
除非有catalyst，一个黑天鹅事件
是不是可能像俄国入侵乌克兰这样的事件
这个最多是灰犀牛
而且如果covid becomes endemic
那么supply chain的情况有所缓解
如果inflation落到3%以下，市场反应就更不会非常强烈
所以this side of the coin的派别认为，就是2015的情况
真的加了一次息以后，市场反而平稳了
所以这是2 sides of the coin
asked: 那现在是不是应该持现金等机会？还是继续买房抗通胀？
1 negative carry on cash
2 opportunity and risk of deploying your cash
Don't get me wrong, not one would suggest you to hold cash forever...
.... to be continued...
现在是个中国人都是地主，地主是那么好当的吗？租金跌一半时，你还能挺住才够格吧？
看了我都不知道说啥
ride real estate through the interest noise.
Stock market crash will eventually spread into real estate. And with the leverage in RE, the pain could be bigger for some people who chased red hot market.
坛子里信息你们那儿能每个人那么多贷款。很多都贷到顶，我一边看的都倒吸口凉气，这么大的leverage风险太大了。。