Financial encyclopedia

2022-09-14

Recently, the oil price fluctuates greatly, creating many opportunities to make wealth. In order to prepare the daily operation of crude oil, you must know OPEC, which is the organization of petroleum exporting countries. Price has an important influence. What is the same point that affects oil price? The Organization of Petroleum Exporting Countries (OPEC) is an intergovernmental international organization composed of 13 countries, which was established on September 14th, 1960. Founded in Baghdad by five founding countries. Today, it is headquartered in Vienna, Austria, and currently has 13 member countries. As of 2019, OPEC's oil production accounted for the global output. 38%, 71.8% of the world's proven oil reserves, can have a significant impact on the global crude oil price previously dominated by the "Seven Sisters" multinational oil companies. OPEC's mission is to "coordinate and unify the oil policies and prices of member countries, ensure the stability of the oil market, and ensure effective, economical and stable oil for oil consuming countries." Supply, to provide oil-producing countries with moderate respect and stable income, and to provide investors in the oil industry with fair returns ". Since the Russian war, the oil price volatility has expanded, and more investment banks have said The volatility of oil price of nearly ten dollars has become the new normal, and the speculative space has greatly increased. Recently, the volatility is very large, because Russia was sanctioned by Europe and America, and the price of natural gas soared, driving up the oil price. But on the other hand, I'm afraid that after the United States enters the winter, Europe's sanctions against Russia's crude oil exports will cause the oil price to soar, and the upper limit of the oil price guidance price will be set to try to resolve the energy crisis. Make the oil price extremely sensitive.

2022-09-08

This week, the market not only digested the fact that the Federal Reserve continued to raise interest rates, but central banks of various countries also raised interest rates drastically. The global determination to suppress inflation is very strong. This time, the Federal Reserve raised interest rates. Come on, how far can the interest rate hike cycle go? Let's review the past performance of the interest rate hike cycle in the United States. The United States has experienced six interest rate hike cycles since 1980s. The main countermeasures are economic overheating, including suppressing soaring prices, internet bubble and real estate bubble. greater part Each interest rate hike cycle is one to two years, and the longest one is in 2015. The Federal Reserve withdrew from the market after coping with the financial tsunami, and Yellen has been gradually raising interest rates until 2018. For three years, the interest rate increased from zero to 2.25% and peaked. The biggest range of interest rate increase is Greenspan's era, which has increased from 1% to 5.25% since 2004, with a huge increase. 4.25%, which was rated as saving the collapse of the US dollar that year. When the US stock market experienced the bursting of the dot-com bubble and the stock market was weak, it relied on high interest rates to stabilize the performance of US dollar assets, thus avoiding the global hegemony of US debt. Collapse of status. This time, the world has experienced unprecedented rescue of the market by printing silver paper. Since March, the Federal Reserve has continuously raised interest rates to 2.5%. It is believed that it will raise interest rates by another 0.75% to 3.25% on the 22nd of this month, and it is similar to that. The information reached its peak when it rose to 4.25% in 2023. In other words, the rate of interest rate increase this time is as urgent as the rate increase cycle after the bursting of the dot-com bubble that year. Fierce, the Fed's determination to control inflation will be as fierce as the old one.

2022-08-30

Last week's JACKSON HOLE global central bank meeting, Powell released an eagle, which scared everyone to leave. Central banks have the right to regulate official and market interest rates to control inflation and economic growth. Maintain moderate economic growth, stimulate growth when necessary or avoid overheating. Therefore, the central bank's assessment of the economic prospects and what economic measures it will implement are extremely important to the market. Great influence. Central banks generally regulate the market by increasing or decreasing interest rates, opening the market, reducing the issuance of bonds and limiting the discount window interest rate. For example, JACKSON HOLE last year At the meeting, when countries failed to see inflation, they frantically printed silver paper to save the economy, which led to hyperinflation in Lebanon. Another example is Powell's falconry last week, when there was a small stock market crash in the global stock market, which shows that all countries The attitude of the central bank is absolutely important. Regarding the global economic climate, the Federal Reserve has always been criticized as a private institution, not an official institution, and there may be conflicts of interests. Sudden problem. Song Hongbing even pointed out in the financial gobbledygook of the currency war that ROTHSCHILD family has always controlled the global banking industry, and since the Federal Reserve is composed of 12 regional federal reserve banks. And each reserve bank is also a corporate body with its own board of directors. The member banks are private banks in the United States, which means that private shareholders can influence the United States through the board of directors. The operation of the Federal Reserve, but although private banks are members of the Federal Reserve Bank, they are not shareholders, and their voting rights are not based on the interests of shareholders. In addition, Midland The Fed needs to be accountable to Congress, and the chairman of the Federal Reserve is also appointed by the then president, thus maintaining a certain degree of public social consideration and maintaining the independent operation of the Federal Reserve.

2022-08-24

Recently, the most explosive discussion in the market must be the debt-interest inversion. Do you know it? Debt interest inversion, that is, the short-term debt interest rate is higher than the long-term debt interest rate, is regarded by the market as a harbinger of economic recession. In the past 50 years, almost every time before the economic recession in the United States, the debt interest rate fell. Generally, 1-year debt is used as short debt, and 10-year debt is compared with long debt. However, is it economic recession to solve the problem that short debt has high interest rate and long debt rate? With a normal development, the future price and interest rate of the economy will be higher, the economy will grow, inflation will rise moderately, interest rate will gradually increase, cost and expenditure will rise, and asset returns will be achieved. The rate will also rise at the same time, because the short-term interest rate must be lower than the long-term interest rate under the optimistic expectation of economic growth. But when the short-term debt interest rate is higher than the long-term debt interest rate, it means that the situation has just reversed. No longer optimistic about the future prospects of the market, capital flows into long-term debt to hedge against risks, which lowers the long-term debt interest rate, thus leading to the "inversion of the yield curve". In the past, the inversion of long-term debt interest rate and short-term debt interest rate was perfectly accurate. To predict the economic recession, knowledge is related to debt and interest, and the next time the economy is in that cycle, it will be easier to make a judgment.

2022-08-16

Central Plains Leading Index is an index that reflects the price of private residential property in Hong Kong, and serves as a reference index for the changing trend of the real estate market in Hong Kong. Index by Centaline Property and City University of Hong Kong Compiled by the Department of Management Science, Business School, the data are obtained from the second-hand transactions of 100 large housing estates in Hong Kong, which are published every Friday. The index was set at 100 points in July, 1997, soon after the Hong Kong property market. U-turn and return to this level only in 2012. Last week, even the girls who graduated from HKU couldn't hold their breath. The latest published value of 177.1 was a 76-week low. The previous record high was 191.34, Although it experienced the third wave of epidemic at that time, the property market didn't fall like SARS in 2003, due to various countries' efforts. Until the The 5th Wave epidemic, coupled with the delisting and interest rate increase in the United States, the leading index of Central Plains cities was Significantly fell back. Experts generally expect that the pace of interest rate increase by the Federal Reserve will be tougher than that at the beginning of the year, and the pressure of mortgage payment will be greater. In addition, the immigration tide and no sign of customs clearance will make the index under pressure in the short term. Let's try 2021. 175 mark since 1997.  

2022-08-09

Since the interest rate hike in the United States in March this year, the interest rate has accelerated upward. Influenced by the interest rate spread, hot money continues to flow out of the local banking system, and has recently dropped to 126.2 billion, losing nearly half of the balance in a few months. The pressure to raise interest rates in Hong Kong is getting higher and higher, and the burden on mortgage payers has also increased. However, the balance of the banking system is related to American interest rates, interest rates and linked exchange rates. The solution will be interlocking? Banking system Balance refers to the daily balance of accounts opened by registered banks in Hong Kong with the HKMA. Under the linked exchange rate policy, the balance will increase or decrease because of the inflow or outflow of Hong Kong dollar funds from the market. However, if funds flow into Hong Kong dollars, that is, market participants buy Hong Kong dollars and Hong Kong dollars strengthen against the US dollar, the HKMA will guarantee the sale of Hong Kong dollars with a strength of 7.75, the monetary base will expand, and interest rates will also be affected by However, with this decline, the exchange rate of the Hong Kong dollar has once again stabilized within the guaranteed range. However, the current situation is just the opposite. As the Federal Reserve continues to raise interest rates, investors have a larger interest return on saving money in the US dollar, attracting investment. Gold flows into the US dollar market, the interest spread widens, the balance of the Hong Kong dollar system shrinks, and the inter-bank lending rate has gone up. Therefore, mortgage payers need to repay more interest. The market generally expects silver If the system balance drops below 100 billion yuan, Hong Kong needs to start raising interest rates to attract market funds back to Hong Kong. What will happen if Hong Kong still doesn't raise interest rates? If the capital continues to flow away, Hong Kong If the interest rate is not raised, the capital will continue to be lost, which will lead to the Hong Kong government or the HKMA lacking sufficient reserves to defend the linked exchange rate, and eventually force the Hong Kong government to break the peg. The situation is just like the Asian financial turmoil in 1997, when the predators demanded Ross argued that many emerging markets in Asia did not have enough reserves to safeguard exchange rate stability. Thailand, Taiwan Province and so on gave up maintaining exchange rate stability one after another, and a sharp drop in currencies was an inevitable result. This is also the third in economics. Paradox, if an economic system wants to remain open and fix the exchange rate, it cannot decide the market interest rate independently. Open economy, exchange rate and interest rate, there are only three choices. If Hong Kong is to remain open If the economy is to be linked to the exchange rate, it must eventually follow the change of interest rate in the United States.  

2022-08-03

The index is calculated from the market value of 69 constituent stocks of the Hang Seng Index, representing 63% of the 12-month average market value coverage of all listed companies on the Hong Kong Stock Exchange. Hang Seng Index constituent stocks, That is, Hong Kong's blue-chip stocks are calculated and reviewed quarterly by Hang Seng Index Co., Ltd., and adjustments of constituent stocks are announced. In recent years, the Hang Seng Index has been criticized, the market situation is sluggish, and it has been underperforming the world for a long time. Many young people, even asset management funds, have turned to speculate in the U.S. stock market or CFD market. The main reasons are that the market is not fair enough, and there are problems in stock selection. A few years ago, shell stocks were traded in the market. Hot, but many of them are speculative. The stock prices of newly listed companies often dive, or the new shell companies have nothing to do with the old shell business. The Stock Exchange finally rectified, and the most famous one is Chuangchuang. Group building and delisting events. The rampant demon stocks and too much speculation have already hurt many investors' hearts. With the upsurge of buying and selling shells declining, the stock market has become quiet and goose flies for another long time. The reason for the downturn is that there is a serious problem in stock selection. The Hang Seng Index Company's quarterly review of the added and subtracted constituent stocks involves human factors, unlike the S&P index, which is completely set with a set of benchmarks and artificially selected. Stocks are often criticized. If you choose Zuo Jisheng's stocks, you will not choose them if you have potential, which leads to frequent blue spells. Once you are selected as a constituent stock, the stock price will fall back. The main reason is man-made Poor stock selection, often touching the top before dyeing blue, but avoiding the potential enterprises that have just started, resulting in the long-term downturn of the Hang Seng Index. Hang Seng Index fell through 20,000 points again, even if it is not a shareholder, it will make Many retirees have wasted decades of MPF contributions. I believe that reforming the Hang Seng Index is also necessary in the future.  

2022-07-01

The 25th anniversary of the Handover   For the past 25 years, One of the key indicators in Hong Kong, With the price of international products, Turns out the housing market is not the most exaggerated rise Xiaobian artificial not catch up with housing prices, I can't even catch up with a bag If the year according to the buried pants  buy two gold coins may eat more than 25 years package Learn more every day, Retail investors become experts

2022-06-29

I talked to you earlier about inflation, Inflation is often associated with economic growth But given that the U.S. will record a decline in GDP in the first quarter, While the economy is contracting While prices soar? Inflation can be roughly divided into Demand push inflation(Demand push inflation)↗️ and Cost pull inflation(Cost pull inflation)↖️ In addition to the global rush to print silver paper, the epidemic and the war between Russia and Ukraine are also contributing to the current inflation, leading to a serious imbalance in the supply chain. The increase of the commodity market 🪙, and the increase of energy and food is much higher than that of minerals, which shows that the war between Russia and Ukraine has led to the limited supply of food and energy in Europe (Ukraine is the granary of Eastern Europe, And Russia is the major energy supplier of Europe), which also represents that the current inflation is caused by cost pull, and the inflation crisis is caused by supply chain problems   As you can see in the figure above, If demand drives inflation ↗️ As the market demand increases, Prices can rise in line with economic growth At around 2-3% a year, the central bank would like inflation to rise in tandem with growth   But this time it was a supply chain break, Cost driven inflation ↖️ Reduced global supply, Prices go up, Instead, the economy contracted If it continues, You have stagflation The economy turns sour, But citizens' purchasing power continues to decline, It's rain all night long It also explains why this time inflation will be accompanied by recession  

2022-06-24

  Do you know how serious global inflation is? Federal Reserve Chairman Jerome Powell testified on monetary policy in the House of Representatives. Much talk is sure to suppress inflation both determined The us inflation environment is at its worst in 40 years Forty years ago, Volcker, then chairman of the Federal Reserve, There was a crazy rate hike to 20 per cent Remember that the average annual return of warren Buffett 🥸 is about 30%, But the market rate was already 20 per cent. Nowadays a lot of fund managers do not reach 🥹 Global supply chain disruption and two consecutive years 🫗 drain, Both 🇯🇵 Japan, And the leader in planned economy 🇨🇳 China, Inflation is above 2%, The Federal Reserve's target inflation level. Too much inflation can lead to social instability and a collapse of the monetary system Today's grain found that purchasing power is shrinking Can't even keep up with the rigid demand for necessities, It makes it easier for unions to fight capitalists There are even countries that have devalued too quickly because of their catchments, Enterprises use grain as grain Citizens completely abandoned the money exchange system. As a political task, Believe that whether the Fed raises rates or verbally intervenes, They don't stop so fast Learn more every day, Retail investors become experts

2022-06-22

 used to be an overheated economy, and raised interest rates in response to rising inflation. But now, the economy is sluggish, but the world keeps raising interest rates to suppress inflation. What kind of assets will be affected?  1. Rising interest rates push up borrowing costs , increasing the operating pressure of companies and the living burden of families 2) As interest rates rise, pressure on housing prices increases  3. Promote the inflow of foreign capital and the relative rise of the local currency exchange rate, which is favorable for imports but affects exports  4. Reducing money supply depresses investment and stock market falls  

2022-06-16

  The Fed's latest dot plot shows that U.S. interest rates will continue to climb rapidly, peaking in 2023 and starting to cut in 2024 . What is a lattice diagram? The point solution will be opposite the breath point Enlightening? DOT PLOT is actually a graphical record of the forecasts of the 18 FOMC members for future interest rates. In the figure, 0.25 per cent is used Calibration . Members' average annual interest rate expectations are shown on the same chart in the form of scattered dots , with each point representing a member's interest rate expectations To see the number of possible rate increases in each year . Although the dot plot does not give voting rights to all 18 members each year , the Fed rotates voting members each year because This record of the intention of all members will also have implications for future information. However, the dot plot, like a dark vote, is not registered, so it also becomes a blind spot , the final result is possible Different from the dot plot  depending on voting intentions Learn more every day, Retail investors change experts