The Spell of Big A: When Infinite Bullets Meet Infinite Chips

The stock market is a barometer of sentiment

Disappointment with Big A has long spread from home to abroad.

Indeed, in the past few years, major overseas economies have generally ushered in waves of stock market rally in both monetary and fiscal easing.

Even though monetary tightening began last year, stocks are generally good on the premise of fiscal easing and the Fed's export of money to specific countries.

From a standpoint, the vast majority of U.S. allies and quasi-allies are doing well. On the contrary, like ours, it is difficult to say enough.

In fact, looking at the map, we can see at a glance that the stock markets of the US friendly countries near China are rising.

It has to be said that this is an extremely cruel financial war, but it is not so simple.

From the perspective of tactical design, the US benchmark interest rate first burst, which directly provides the overall trend of shorting Chinese assets.

However, generally speaking, under this trend, China's foreign exchange control system can still shoulder it.

Then, pulling up the stock markets of several economic powers around China and playing with each other on exchange rate depreciation really put us on the fire.

The classic harvesting Chinese pose is the following package:

U.S. interest rate hikes

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The yen depreciated

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The surrounding stock market skyrocketed

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Big A overseas short top matching package

As long as this pattern is formed, China's foreign trade is the outflow of dollars, the capital item is the outflow of dollars, and even a large amount of domestic savings are outflowing out through ant moving.

In addition, under this pattern, domestic monetary policy is not a powerful tool in the near future.

tightening the currency, in which assets shrink and domestic demand "vomits"; Loosen the currency and be shorted directly.

The impact on residents' families is that they feel dark, that everything they do is wrong, and that they are extremely pessimistic about their expectations for the future.

At this time, with the strong public opinion offensive of the United States, this sentiment will continue to ferment, thereby greatly strengthening the power of shorting.

Because the success of shorting ultimately depends on whether domestic households and business owners participate. If you do not participate, you will not be involved; If actively participated, it is a replica of the Southeast Asian crisis of '97.

Everything has two sides, and reality itself is contradictory.

By temporarily sacrificing the liquidity of domestic housing stocks and cooperating with a sound monetary policy, the liquidity in domestic private savings is extremely limited. Therefore, now the private sector really wants to actively participate in shorting RMB assets, and the ability is insufficient.

Please pay attention to this key point, because this is one of the reasons why the visible hand has not been fully rescued in the first half of this year.

To go short, you need to sell the yuan and then buy foreign currency assets.

You don't even have RMB, how else can you participate in this international financial war? There is no other way than to scold the mother for being bearish on Chinese real estate stocks.

Isn't this what the visible hand wants to see?

Conversely, if everyone now has cash flow in their pockets, they will encounter the dilemma of 2015.

In 2015, the 1,000-stock limit fell and the exchange rate reform, and the national cash flow was still very abundant at that time. A large amount of domestic capital flowed out, and finally foreign reserves disappeared by $1 trillion.

If it weren't for the crazy rise in real estate in 2015~2017, if it weren't for the yield of domestic assets outperforming the yield of overseas (when the Fed was gradually raising interest rates), there would have been a problem long ago.

That is to say, the United States has been short on us, in fact, since 2015, not in 2018, Trump made trouble, let alone the 2022 interest rate hike cycle.

Of course, our "seven-wounded fist" is also very costly.

After all, the current domestic "cash flow statement problem", if it drags on a little longer, the domestic demand will shrink rapidly, the market confidence will be completely lost, and investment and consumption will "collapse" at that time, which is not a joke.

In fact, we are facing such risks!!

Specific to the feeling of many people, as long as the market is rescued, all stocks are dumped, all houses are thrown away, "I will not play in the future." Similar sentiments are escalating and spreading, and this is the most blunt price manifestation.

In exchange, the United States also vomited blood here. The 10-year U.S. Treasury yield soared, and the pressure on U.S. Treasury financing was too great. Moreover, the financial war of several neighboring economic powers to cooperate with the United States to short China is also too strong in the depreciation of the exchange rate, and the blow to their savings is also huge.

It can be said that this is a financial war game with no absolute winner, but who pays less. Given that we have a strong foreign exchange control system, we are particularly intent on artificially lengthening the length of the "cash flow statement problem" so that the United States and its allies cannot completely succeed in this turmoil.

Now the big A is like Chinese football. Football is so bad, but it is 1.2 billion in debt. As for the big A, the same is true.

Long-term fixed at 3,000 points, the performance of individual stocks is even more difficult to say.

It can be said that it was stunned at 3,000 points, and there is no financing function.

The profit margin of about 80% of enterprises is lethargic, so from the perspective of interest players, they can only rely on shorting the spread in the stock market to obtain "additional income".

When the pattern of overseas short-selling forces opens, the major shareholders of the enterprises inside also actively "save themselves", taking advantage of various opportunities to be optimized in the system to desperately short.

So, the current stock market is actually like this:

When the infinite bullet meets the unlimited chips in the hands of the major shareholders, the former is bound to fail miserably to the latter.

So far, the registration system has indeed not been able to change the rules of the game in leek fields, but has made harvesting leek fields easier.

At this time, if there is no systemic change, even if a 10 trillion yuan equalization fund is launched, it will be fine?

Big A's situation today is not only overseas shorting, but also the imperfect system inside. The latter is fundamental, the former is a speaker, and this cannot be put before the horse.

However, I have previously said in an article that without a strong capital market, it will obviously discourage domestic innovation.

Let entrepreneurs rely entirely on industrial income to make profits, which is risky and stimulating, and is very detrimental to innovation.

It is necessary to rely on the power of the stock market, just like American technology companies (seven golden flowers), enterprises are cattle, and the stock market has greatly increased this cattle, so that innovation really has a material basis.

Therefore, next, the big A is both hands:

After the financial war is almost over, it is still necessary to inject water on a large scale to restore the liquidity of the market;

For roundabout illegal cash-outs, game making, and arbitrage, it is necessary to improve supervision as soon as possible and crack down hard.

It is not easy for residential families to make money, a market "less than who loses", that is, a garbage market, who else will play? When everyone stops playing, how far is it from the end of the song?

Today, China relies on the stock market to solve several problems:

Pension additional income

Innovation financing and incentives for technology companies

Equity fiscal transformation

Reduce the demand of state-owned enterprises for bank financing

Strike the layout as soon as possible, it has reached the point where it is urgent!

Subsequently, for the big A in 2024, at least the first half of the year, it is still worth looking at. However, whether this is seasonal or trending depends on the operation of the visible hand over the next few months.

We cannot lose the war of science and technology, the war of finance, and the confidence of the market.

We are getting closer and closer to the inflection point in the market, however, we still need to wait for the corresponding signal.