正當國內股市(上海)升破3000點，昨晚DJI又回升，美匯卻下降之際，美國的債券價格卻沒有因此而下瀉；除3個月和6個月的美債孳息上升外，其餘的孳息都下跌，甚至英、德、日、澳和巴西的國債孳息也在下跌。企業債券更不消說—其平均孳息經常都可以創新低。黃金價格有回升(卻不像先前”金股齊鳴” 時瘋狂) ，而BDI卻已經由高位回落25%。先前熱炒經濟V形復甦(或者如某些評論家言” 市民仍天天消費，根本沒有衰退過”)和通脹的氣氛現在已經消失，代之的是” 緩慢但確實的經濟復甦” 。
問題是看一看美國的銀行的貸款，就算熱搶的房貸市場，大額的按揭(JUMBO) 息率已經到了高個月的高位(30 years fixed = 7.1%; 15 years fixed = 6.67%; 5/1-year ARM = 5.94%)；就算細額的按揭，長期的(30 years fixed, 15 years fixed) 和中期浮息的(5/1-year ARM) 都徘徊在3個月的高位，只有1-year ARM的按揭息率在4.05%。這明顯是銀行為了令客戶能繼續供樓以及政府的資助才人為地壓下來。另一方面，由存款證的利率持續下跌來看，儘管銀行暫時不” 缺錢” ，但是市民亦顯然地寧可輸息都存錢而不是大肆消費，和就業市場混合一起看的話，市民對前景的看法絕不如傳媒和評論員所說的那麼樂觀。
Tuesday, June 30, 2009
Thursday, June 25, 2009
Durable Good Orders May 2009
I have just checked the web site of US Census Bureau to acquire the way they calculate the durable good orders. The formula can be found in the Q&A, as follows:
New Orders = Current Shipment + Unfilled Orders (current month) – Unfilled Orders (prior month)
The interesting thing I found is, according to the latest announcement:
Shipment (May) = 169.9billion
Unfilled orders (May) = 747.5billion
Unfilled orders (April) = 749.5billion
So by the formula:
New Orders (May) = 169.9b + 747.5b – 749.5b = 167.9b (May)
Now, for April, the figures are as follows:
Shipment (April) = 173.5b
Unfilled Orders (April) = 749.5b
Unfilled Orders (March) = 757.8b
Therefore,New Orders (April) = 173.5b + 749.5b – 757.8b = 165.2b (April)
New Orders (May) = 167.9b > New Orders (April) = 165.2b
However, the contraction on unfilled orders as well as shipment only means the situation is actually getting worse, not getting better. The consecutive contraction in shipment means the actual demand on the goods are decreasing, while the consecutive decrease on unfilled orders, if coupled with the decrease on inventory and shipment, means more inventory-clearing than "efficiency improvement". Thus, the so-called new orders increase is more an illusion.
New Orders = Current Shipment + Unfilled Orders (current month) – Unfilled Orders (prior month)
The interesting thing I found is, according to the latest announcement:
Shipment (May) = 169.9billion
Unfilled orders (May) = 747.5billion
Unfilled orders (April) = 749.5billion
So by the formula:
New Orders (May) = 169.9b + 747.5b – 749.5b = 167.9b (May)
Now, for April, the figures are as follows:
Shipment (April) = 173.5b
Unfilled Orders (April) = 749.5b
Unfilled Orders (March) = 757.8b
Therefore,New Orders (April) = 173.5b + 749.5b – 757.8b = 165.2b (April)
New Orders (May) = 167.9b > New Orders (April) = 165.2b
However, the contraction on unfilled orders as well as shipment only means the situation is actually getting worse, not getting better. The consecutive contraction in shipment means the actual demand on the goods are decreasing, while the consecutive decrease on unfilled orders, if coupled with the decrease on inventory and shipment, means more inventory-clearing than "efficiency improvement". Thus, the so-called new orders increase is more an illusion.
Tuesday, June 23, 2009
短評
即月期指的Power OI每當在期指/現貨所謂"創新高"或"上升"的日子減弱，然後是連續兩至三日都維持在1以下，顯示離場套利者多。同時，在回升開始時的Power OI均只有1.01左右，顯示真正入場持貨者不多。
同月期權的未平倉合約中，以20000C和17200P最多。最多新流入的未平倉合約的分別是20400C和18000P。加上本周議息，市場有可能借機套利走路以看聯儲局的決定(或者"造勢"讓聯儲局維持原判)，故此有可能在這兩天先鬆人，震散好倉，然後在聯儲局宣佈利率不變後在星期四期指結算日夾淡倉。但是，要注意的是這種安排就算以大戶而言亦很有風險，一旦個勢造得太大，是有機會失控的。
同月期權的未平倉合約中，以20000C和17200P最多。最多新流入的未平倉合約的分別是20400C和18000P。加上本周議息，市場有可能借機套利走路以看聯儲局的決定(或者"造勢"讓聯儲局維持原判)，故此有可能在這兩天先鬆人，震散好倉，然後在聯儲局宣佈利率不變後在星期四期指結算日夾淡倉。但是，要注意的是這種安排就算以大戶而言亦很有風險，一旦個勢造得太大，是有機會失控的。
Monday, June 22, 2009
Economy is Not Yet Recovering...
The news about PPI (-0.1%) and CPI (0.1%) of USA are self-explaining: the previous improved selling on retail goods is more due to the decrease on price rather than the increase of in-the-market disposable income of USA consumers.
The inventory figures will provide further information. Had it been lowering with the level of trade stock, the essence of recovery will go even thinner.
The property rush in China shows cool-down. The renewal of new rental contract experiences a more than expected downward adjustment. For example, a 130sqm flat that can be rented at 12kRMB/mth can now only be rented at 8.6kRMB/mth. Assume the rental return is usually 3.5%, then the market price of that unit drops from 28kRMB/sqm to 22.3kRMB/sqm. Even if we lower the rental return to 3% (assuming that the rental market is worsening), the unit still only worths a mere 26kRMB/sqm, a minimum of 8% drop from the previous price (which is not the peak yet).
Statistics by some surveyors also reveals that despite the so-called rush (by bottom-fishing of the affordables, loosen mortgage, and inadequate supplies from 2008), on average only (cumulative) 50-52% of units have been sold for the "new" apartments opened-for-sale in recent half a year. Even if the shortage of supplies continue, the cumulated unsold units can re-quench the "thrist" of the market.
What is interesting most is about the "reports" by the big i-banks and F.I.s - while they were talking about a quick recovery and inflation just 2-3 weeks ago, now they all start to change the expectation and remain "bearish" on the market. Is this a hint that after the interium report period, something will happen?
The inventory figures will provide further information. Had it been lowering with the level of trade stock, the essence of recovery will go even thinner.
The property rush in China shows cool-down. The renewal of new rental contract experiences a more than expected downward adjustment. For example, a 130sqm flat that can be rented at 12kRMB/mth can now only be rented at 8.6kRMB/mth. Assume the rental return is usually 3.5%, then the market price of that unit drops from 28kRMB/sqm to 22.3kRMB/sqm. Even if we lower the rental return to 3% (assuming that the rental market is worsening), the unit still only worths a mere 26kRMB/sqm, a minimum of 8% drop from the previous price (which is not the peak yet).
Statistics by some surveyors also reveals that despite the so-called rush (by bottom-fishing of the affordables, loosen mortgage, and inadequate supplies from 2008), on average only (cumulative) 50-52% of units have been sold for the "new" apartments opened-for-sale in recent half a year. Even if the shortage of supplies continue, the cumulated unsold units can re-quench the "thrist" of the market.
What is interesting most is about the "reports" by the big i-banks and F.I.s - while they were talking about a quick recovery and inflation just 2-3 weeks ago, now they all start to change the expectation and remain "bearish" on the market. Is this a hint that after the interium report period, something will happen?
Sunday, June 14, 2009
由金融產品看…
昨天去了一個上海的投資講座，其中關於金融產品和樓市，內容頗為有趣。
先說說他們推廣的一隻和4個H股掛鉤的票據，其內容如下：
1. 最低投資: 50k RMB
2. 起始日: 2009-6-22
3. 投資期: 12 個月
4. 條件回報:
a. 條件回報率 1.1667%/當月
b. 條件回報觸發價: 初始價 x 70%
c. 條件回報: 頭兩個觀察期任何一日，表現最差的股票的價錢等於或大過觸發價，則等於100% 本金 x 條件回報率
5. 紅利回報:
a. 紅利回報率 1.1667% /當月
b. 紅利回報觸發價: 初始價 x 90%
c. 紅利回報: 第三個觀察期起任何一日，表現最差的股票的價錢等於或大過觸發價，則等於100% 本金 x 紅利回報率
6. 提早贖回:
a. 提早贖回價：初始價 x 100%
b. 提早贖回回報: 第三個觀察期起任何一日，表現最差的股票的價錢等於或大過觸發價，則等於100% 本金
7. 下檔觸發水平: (全期)
a. 下檔觸發水平價: 初始價 x 60%
b. 下檔觸發水平虧損：100% 本金 x -10% + 觸發前所收的利息
8. 到期日回報：
a. 如果沒有發生提前觸發事件，則回報：
最小值(100%，最大值(90% or (最終計價日的最差股票收市價/該股票的初始價)x100%))
9. 掛鉤股票：中國通信(0552)，中鐵建(1186)，中鐵(0390)，中國銀行(3988)
簡單說，如下:
頭兩個觀察期：
1. 利息
a. 如最低價 < 初始價 x 70%，回報 = 0% b. 如最低價 >= 初始價 x 70%，回報 = 1.1667% x 2
2. 本金(當時值)
a. 如最低價曾經 <= 初始價 x 60%，本金 x 90% to 100%
b. 如最低價 > 初始價 x 60%，本金 x 100%
第三至十二個月：
1. 利息
a. 如最低價 < 初始價 x 90%，回報 = 0%
b. 如最低價 >= 初始價 x 90%，回報 = 1.1667% (該月)
2. 本金(當時值)
a. 如最低價曾經 <= 初始價 x 60%，本金 x 90% to 100%
b. 如最低價 > 初始價 x 60%，本金 x 100%
總的來說，
1. 最好的結果，14%回報 (收市價 < 初始價；最低價 >= 初始價 x 90%)
2. 最差的結果，-10%回報 (收市價 < 初始價；最低價 < 初始價 x 60%；第一至二個月最低價從未 >= 初始價 x 70%；第三至十二個月最低價從未 >= 初始價 x 90%)
明顯地，站在銀行的角度來說：
1. 止蝕盤在初始價，
2. 在賬面上，其對客戶真正的負債(liability)其實就是客戶本金 x 90%，其籌集的資本就是客戶本金 x 10%，
3. 而客戶本身的90%存款裡，更可以按正常規距做貸款，而且不用附利息，
4. 對銀行而言，他們的合理期望應該是由6月底起的兩個月內，目標股票不會調整多於30%，讓客戶先享受約2.3334%的利率，然後大市一直不穿過6月底的90%，並且亦不跌低過60%，則銀行可以既有便宜資金(2.3334%買進額外的10% ) ，賬目好看(負債比做定存低)，客戶多少有點甜頭(2.3334%)，好讓他們繼續並增加來往，
5. 因此，估計銀行賭目標股票在六月底時已到十二個月內的高位，並且不會再重返該位的90%，而且估計在6-8月間有可能下跌不超過30%，並期望總體沒有跌過超過40%；或者跌過後deep V在最後一個月能彈回初始價的90-99%左右。
6. 而且，混合整體業務來看，如果能維持一個較多波動的市況，即跌1 - 39%內，則銀行已足以在幫大戶做套戥時賺足顧問費，佣金，管理費，再加上原有的息差，多分一點還是非常合算。
先說說他們推廣的一隻和4個H股掛鉤的票據，其內容如下：
1. 最低投資: 50k RMB
2. 起始日: 2009-6-22
3. 投資期: 12 個月
4. 條件回報:
a. 條件回報率 1.1667%/當月
b. 條件回報觸發價: 初始價 x 70%
c. 條件回報: 頭兩個觀察期任何一日，表現最差的股票的價錢等於或大過觸發價，則等於100% 本金 x 條件回報率
5. 紅利回報:
a. 紅利回報率 1.1667% /當月
b. 紅利回報觸發價: 初始價 x 90%
c. 紅利回報: 第三個觀察期起任何一日，表現最差的股票的價錢等於或大過觸發價，則等於100% 本金 x 紅利回報率
6. 提早贖回:
a. 提早贖回價：初始價 x 100%
b. 提早贖回回報: 第三個觀察期起任何一日，表現最差的股票的價錢等於或大過觸發價，則等於100% 本金
7. 下檔觸發水平: (全期)
a. 下檔觸發水平價: 初始價 x 60%
b. 下檔觸發水平虧損：100% 本金 x -10% + 觸發前所收的利息
8. 到期日回報：
a. 如果沒有發生提前觸發事件，則回報：
最小值(100%，最大值(90% or (最終計價日的最差股票收市價/該股票的初始價)x100%))
9. 掛鉤股票：中國通信(0552)，中鐵建(1186)，中鐵(0390)，中國銀行(3988)
簡單說，如下:
頭兩個觀察期：
1. 利息
a. 如最低價 < 初始價 x 70%，回報 = 0% b. 如最低價 >= 初始價 x 70%，回報 = 1.1667% x 2
2. 本金(當時值)
a. 如最低價曾經 <= 初始價 x 60%，本金 x 90% to 100%
b. 如最低價 > 初始價 x 60%，本金 x 100%
第三至十二個月：
1. 利息
a. 如最低價 < 初始價 x 90%，回報 = 0%
b. 如最低價 >= 初始價 x 90%，回報 = 1.1667% (該月)
2. 本金(當時值)
a. 如最低價曾經 <= 初始價 x 60%，本金 x 90% to 100%
b. 如最低價 > 初始價 x 60%，本金 x 100%
總的來說，
1. 最好的結果，14%回報 (收市價 < 初始價；最低價 >= 初始價 x 90%)
2. 最差的結果，-10%回報 (收市價 < 初始價；最低價 < 初始價 x 60%；第一至二個月最低價從未 >= 初始價 x 70%；第三至十二個月最低價從未 >= 初始價 x 90%)
明顯地，站在銀行的角度來說：
1. 止蝕盤在初始價，
2. 在賬面上，其對客戶真正的負債(liability)其實就是客戶本金 x 90%，其籌集的資本就是客戶本金 x 10%，
3. 而客戶本身的90%存款裡，更可以按正常規距做貸款，而且不用附利息，
4. 對銀行而言，他們的合理期望應該是由6月底起的兩個月內，目標股票不會調整多於30%，讓客戶先享受約2.3334%的利率，然後大市一直不穿過6月底的90%，並且亦不跌低過60%，則銀行可以既有便宜資金(2.3334%買進額外的10% ) ，賬目好看(負債比做定存低)，客戶多少有點甜頭(2.3334%)，好讓他們繼續並增加來往，
5. 因此，估計銀行賭目標股票在六月底時已到十二個月內的高位，並且不會再重返該位的90%，而且估計在6-8月間有可能下跌不超過30%，並期望總體沒有跌過超過40%；或者跌過後deep V在最後一個月能彈回初始價的90-99%左右。
6. 而且，混合整體業務來看，如果能維持一個較多波動的市況，即跌1 - 39%內，則銀行已足以在幫大戶做套戥時賺足顧問費，佣金，管理費，再加上原有的息差，多分一點還是非常合算。
Friday, June 12, 2009
Assumption on My Pessimistic View on Stock Market
My assumption is: expectation eventually cannot restart the actual economy without a substantial shift of paradigm: i.e. a return to value creation but not price chasing. The current measures only encourage short term trading on selected market; the aim is to "save" the banks and institutional investors at the hope that they can loan money to support consumption again.
Nevertheless, the problem is apparent: while bank is willing to lend money for securities and for ARM, it tightens up credit available to consumers (as reflected on credit card) and corporates (as reflected on commercial rate). Even for the property market, the mortgage rate for longer term fixed rate is higher than 6 months prior (with spread the highest). The problem is "contained" at the bank level but not spreads to consumer and corporate level. Consumption and new technology (be if green or IT or bio-tech) cannot advance. Economy cannot really recover but maintain at a lower equilibrium point than previous.
Without new supports, even speculators will one day run out of interpretation to boost the market. By that time they will leave the market, and it will be when the market hits lower point.
Nevertheless, the problem is apparent: while bank is willing to lend money for securities and for ARM, it tightens up credit available to consumers (as reflected on credit card) and corporates (as reflected on commercial rate). Even for the property market, the mortgage rate for longer term fixed rate is higher than 6 months prior (with spread the highest). The problem is "contained" at the bank level but not spreads to consumer and corporate level. Consumption and new technology (be if green or IT or bio-tech) cannot advance. Economy cannot really recover but maintain at a lower equilibrium point than previous.
Without new supports, even speculators will one day run out of interpretation to boost the market. By that time they will leave the market, and it will be when the market hits lower point.
Wednesday, June 10, 2009
中美基金大戰？
以下內容節錄自信報論壇：(http://www.hkej.com/template/forum/php/forum_details.php?blog_posts_id=15714&success=y)
金鋒 美國的大投資銀行，大沽中資銀行銀行的股票，這一次中資入市，放甩了美國佬，中資的銀行股火箭一樣升上去，美國基金是追還是不追？ 6月10日 20:59
...Chan David 金鋒兄：如果中國還是多少要依賴出口到美國去賺美元買資源，則人民幣兌美元的匯價就不能不穩定，結果當是跟著人家印銀紙。至於對賭，以根基而言雙方勝擅長：美國可以濫印；中國可以建圍牆，難分上下。不過，以貨幣流動能力而言，中國的基金光是在外管局就要輸多約200點子，以體積和機動力而言亦無法真正跟美資硬碰。更何況美國的金融產品比中國多太多，剃刀門眉無失拖。中國基金的確只可以順勢，美國基金則可以做勢；最可憐的是散戶(錢多錢少都一樣)：不是失勢就是去勢。 6月10日 21:32
...金鋒 陳兄，散户失勢／或者去勢／精釆之句。做太監，被大鱷閹，謂之去勢也。中國銷美商品，４月又順差１６７億美元，借錢俾美國消費，西南二伯父之策略，順勢渡其升仙也。 6月10日 23:23
...金鋒 到了七月份，聯邦儲備局無論如何都會出口術支持美元，美元己跌咗１２％，一定會說美國將會加息。究竟是聯儲局長直接講，或是在聯邦儲備局議息記錄的場合講，值得注意。股市炒高之後，必然獲利回吐，問題是利用什麼技巧。我的預測，股市的走勢是ＷＷ型ｏ通縮和通脹相雜出現。工業產品通縮，資源和農產品通脹，即成本上升製造通脹，不是消費需求大升製造通脹ｏ這其實是最糟糕的經濟前景。 6月10日 23:38
...Chan David 金鋒兄：然而美國亦可用間接攻勢，殺港藍籌震倉，先行於其賺沽空錢並拖低中資效應也。多餘的錢則先短期離開回美購美債護盤，並可做成金管局為保弱方保證而一下子抽走港元，屆時還在托高H股的中資基金有機會挨貴息兼冇承托，再加上美元回強，連匯價都輸埋先番歸呢！ 6月10日 23:54
金鋒 美國的大投資銀行，大沽中資銀行銀行的股票，這一次中資入市，放甩了美國佬，中資的銀行股火箭一樣升上去，美國基金是追還是不追？ 6月10日 20:59
...Chan David 金鋒兄：如果中國還是多少要依賴出口到美國去賺美元買資源，則人民幣兌美元的匯價就不能不穩定，結果當是跟著人家印銀紙。至於對賭，以根基而言雙方勝擅長：美國可以濫印；中國可以建圍牆，難分上下。不過，以貨幣流動能力而言，中國的基金光是在外管局就要輸多約200點子，以體積和機動力而言亦無法真正跟美資硬碰。更何況美國的金融產品比中國多太多，剃刀門眉無失拖。中國基金的確只可以順勢，美國基金則可以做勢；最可憐的是散戶(錢多錢少都一樣)：不是失勢就是去勢。 6月10日 21:32
...金鋒 陳兄，散户失勢／或者去勢／精釆之句。做太監，被大鱷閹，謂之去勢也。中國銷美商品，４月又順差１６７億美元，借錢俾美國消費，西南二伯父之策略，順勢渡其升仙也。 6月10日 23:23
...金鋒 到了七月份，聯邦儲備局無論如何都會出口術支持美元，美元己跌咗１２％，一定會說美國將會加息。究竟是聯儲局長直接講，或是在聯邦儲備局議息記錄的場合講，值得注意。股市炒高之後，必然獲利回吐，問題是利用什麼技巧。我的預測，股市的走勢是ＷＷ型ｏ通縮和通脹相雜出現。工業產品通縮，資源和農產品通脹，即成本上升製造通脹，不是消費需求大升製造通脹ｏ這其實是最糟糕的經濟前景。 6月10日 23:38
...Chan David 金鋒兄：然而美國亦可用間接攻勢，殺港藍籌震倉，先行於其賺沽空錢並拖低中資效應也。多餘的錢則先短期離開回美購美債護盤，並可做成金管局為保弱方保證而一下子抽走港元，屆時還在托高H股的中資基金有機會挨貴息兼冇承托，再加上美元回強，連匯價都輸埋先番歸呢！ 6月10日 23:54
Stock Market Rules the ChinAmerica?
I am very disappointed by the crappy editorial of HKEJ.
An asset price inflation on housing market and stock market is not the indicator for recovery. An active commercial activity is the real index of economic recovery. Currently the rises of property and equity market are triggered by extremely large liquidity.
Take an example. Today in the morning I received a promotional text message from BOC regarding "borrowing 1 week short-term money by p.a. at 1.2% for stock investment".
Another example: Mortgage rate in China now is averaged around 4.13% for 70% downpayment and 15 year installments. Of course, one of the recent triggers of the current surge, is that HK, TW, and Macau people who use overseas bank accounts can enjoy an "equivalent rate privilege" if they mortgage on the China branch of those banks. In that case, for example, HK people can enjoy 3.5 - 3.7% mortgage rate. Some bank staff can even enjoy 1% mortgage rate for the self-use property. The spread between China and HK mortgage rate, plus the strength of RMB, encourages affordable Chinese people investing their money in HK - everything in HK seems "cheap" to Chinese citizens now.
On the other hand, when I checked the ICBC website for corporate and commercial loans, the shortest 1 month loan will cost you 5.23%, subjected to restricted due diligence by their banks. Except the government subsidized industries, others will still suffer from the lack of liquidity (for survival or for expansion) and the lack of orders (and hence over-capacity). Domestic market does not decline - and yet does not enhance either. The daily products prices remain at 2006-2007 level (according to my observation only) but not as high as 2008. Some electrical and electronic consumer products are even on bigger discounted sales (up to 60-70% off). Expat restaurants and pubs are directly hit: except soccer night they are only half or less filled. And of course, we have never included the nominally "studying" or "practising" fresh-grads who earn no better off than half the "normal" salary.
Integrating with Bloomberg news - "high unemployment and a continued bad housing market will prevent the FED from raising rates" (which to any normal people is certainly a bad news) - I cannot see how ChinAmerica is doing well. What scares me most is that now people, including analysts, cannot distinguish inflation caused by hot economic activities from inflation caused by excessive money supplies. By definition, I agree that an over supply of money trigger inflation. But whether or not such money is "allocated" into ecnomic activities, or simply on trading securities, makes the decisive difference: whether or not the money is used mainly in growing the pie, or is used mainly in zero-sum trading game. The latter one fattens the minority who cannot support the consumption market.
An asset price inflation on housing market and stock market is not the indicator for recovery. An active commercial activity is the real index of economic recovery. Currently the rises of property and equity market are triggered by extremely large liquidity.
Take an example. Today in the morning I received a promotional text message from BOC regarding "borrowing 1 week short-term money by p.a. at 1.2% for stock investment".
Another example: Mortgage rate in China now is averaged around 4.13% for 70% downpayment and 15 year installments. Of course, one of the recent triggers of the current surge, is that HK, TW, and Macau people who use overseas bank accounts can enjoy an "equivalent rate privilege" if they mortgage on the China branch of those banks. In that case, for example, HK people can enjoy 3.5 - 3.7% mortgage rate. Some bank staff can even enjoy 1% mortgage rate for the self-use property. The spread between China and HK mortgage rate, plus the strength of RMB, encourages affordable Chinese people investing their money in HK - everything in HK seems "cheap" to Chinese citizens now.
On the other hand, when I checked the ICBC website for corporate and commercial loans, the shortest 1 month loan will cost you 5.23%, subjected to restricted due diligence by their banks. Except the government subsidized industries, others will still suffer from the lack of liquidity (for survival or for expansion) and the lack of orders (and hence over-capacity). Domestic market does not decline - and yet does not enhance either. The daily products prices remain at 2006-2007 level (according to my observation only) but not as high as 2008. Some electrical and electronic consumer products are even on bigger discounted sales (up to 60-70% off). Expat restaurants and pubs are directly hit: except soccer night they are only half or less filled. And of course, we have never included the nominally "studying" or "practising" fresh-grads who earn no better off than half the "normal" salary.
Integrating with Bloomberg news - "high unemployment and a continued bad housing market will prevent the FED from raising rates" (which to any normal people is certainly a bad news) - I cannot see how ChinAmerica is doing well. What scares me most is that now people, including analysts, cannot distinguish inflation caused by hot economic activities from inflation caused by excessive money supplies. By definition, I agree that an over supply of money trigger inflation. But whether or not such money is "allocated" into ecnomic activities, or simply on trading securities, makes the decisive difference: whether or not the money is used mainly in growing the pie, or is used mainly in zero-sum trading game. The latter one fattens the minority who cannot support the consumption market.
Wednesday, June 3, 2009
Another Small Swinging
The ratio between new open interest contracts and excercised ones for HSI futures on June is 1.03 compared with 1.04 yesterday. So, combining with the 2 consecutive 0.99 on the 2 days before yesterday, it seems that the market has found a new balance zone and will fluctuate around that.
Tuesday, June 2, 2009
Bull Bull Bull...Fool Fool Fool?
Everyone believes a bull market is running on the track; everyone believes a recovery is running on the track.
Consumer Confidence shoots up high; crude oil price and BDI hits recent new high; PMI is improving. Everything but the jobless claim sounds less profounding.
This is a trap.
A way to view the economy and the stock market is the business activity - by the banks, SMEs, and corporates.
Lets start from banks.
The followings are rates by FED and banks (by bloomberg):
1. 30 year fixed mortgage 5.32% > 4.94% (1 month prior) and 5.25% (3 months prior)
2. 1-year ARM 4.53% <> 2.76% (1 month prior) and 2.71% (3 months prior)
4. 1-year CD 1.87% < 2.01% (1 month prior) and 2.17% (3 months prior)
The spreads are as follows:
1. 30 year: 255pts (present); 218pts (1 month prior); 254pts (3 months prior)
2. 1 year: 266pts (present); 327pts (1 month prior); 306pts (3 months prior)
By practice, applicants for 30 year fixed mortgage have better credit ratings and financial strength than those for 1 year ARM. Setting aside the issues "Wall Street and Main Street guru lost hips and can no longer afford luxuries", such rising, comparing with huge decrease on 1-year ARM, is still abnormal. In other words, banks encourage people with higher probability of delinquency to borrow and discourage people with better abilities to pay.
How about the commercial loans on the other hand?
Instead of using LIBOR as a metric stick, banks are using Treasuries rates plus risk premium to evaluate, mainly due to the fact that the most availably "reliable" asset is the paper printed by FED. So lets take a look on the treasuries rates quoted today (by bloomberg):
3-month: 0.11%; 12-month: 0.44%; 2-year: 0.95%; 10-year: 3.66%; 30-year: 4.52%
Normally the risk permium will be somewhere around 150pts. The bank will usually on top ask for another 50pts as their own profits (and commissions to the CRM). So, lets take it as 200pts. Now the bank will not use the short-term rate to grant a loan. The prime rate is at 3.25%, and most likely it will use the 10-year or 30-year rate, depending on the credit rating, to loan to the clients. Therefore, they will ask for the range 5.66% - 6.52%.
What is the benchmark investment grade corporate bond rate recently? 6.06%
Apparently for the corporate that can afford the adhered charges, issuing their bonds for sales is even more attractive than the bank rate. On the other hand, for the companies that cannot afford or too small to be eligible to borrow from open market, the bank will certainly charge the premium higher than 6.52%. In either case, small to medium size business cannot get the loans it needs.
Consumer Confidence shoots up high; crude oil price and BDI hits recent new high; PMI is improving. Everything but the jobless claim sounds less profounding.
This is a trap.
A way to view the economy and the stock market is the business activity - by the banks, SMEs, and corporates.
Lets start from banks.
The followings are rates by FED and banks (by bloomberg):
1. 30 year fixed mortgage 5.32% > 4.94% (1 month prior) and 5.25% (3 months prior)
2. 1-year ARM 4.53% <> 2.76% (1 month prior) and 2.71% (3 months prior)
4. 1-year CD 1.87% < 2.01% (1 month prior) and 2.17% (3 months prior)
The spreads are as follows:
1. 30 year: 255pts (present); 218pts (1 month prior); 254pts (3 months prior)
2. 1 year: 266pts (present); 327pts (1 month prior); 306pts (3 months prior)
By practice, applicants for 30 year fixed mortgage have better credit ratings and financial strength than those for 1 year ARM. Setting aside the issues "Wall Street and Main Street guru lost hips and can no longer afford luxuries", such rising, comparing with huge decrease on 1-year ARM, is still abnormal. In other words, banks encourage people with higher probability of delinquency to borrow and discourage people with better abilities to pay.
How about the commercial loans on the other hand?
Instead of using LIBOR as a metric stick, banks are using Treasuries rates plus risk premium to evaluate, mainly due to the fact that the most availably "reliable" asset is the paper printed by FED. So lets take a look on the treasuries rates quoted today (by bloomberg):
3-month: 0.11%; 12-month: 0.44%; 2-year: 0.95%; 10-year: 3.66%; 30-year: 4.52%
Normally the risk permium will be somewhere around 150pts. The bank will usually on top ask for another 50pts as their own profits (and commissions to the CRM). So, lets take it as 200pts. Now the bank will not use the short-term rate to grant a loan. The prime rate is at 3.25%, and most likely it will use the 10-year or 30-year rate, depending on the credit rating, to loan to the clients. Therefore, they will ask for the range 5.66% - 6.52%.
What is the benchmark investment grade corporate bond rate recently? 6.06%
Apparently for the corporate that can afford the adhered charges, issuing their bonds for sales is even more attractive than the bank rate. On the other hand, for the companies that cannot afford or too small to be eligible to borrow from open market, the bank will certainly charge the premium higher than 6.52%. In either case, small to medium size business cannot get the loans it needs.
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