Note to Readers: During periods of market volatility, the proven strategy is to lengthen your time horizon and reduce the frequency of your transactions. Transacting frequently in fast-moving/choppy markets is guaranteed to produce errors. Reduce your errors, and maintain your composure. If you need guidance and would like to talk directly with Strategist Larry on your positioning, you’re welcome to join us.
We will continue to provide our Public audience best-in-class general overviews and our Private Community actionable strategy when opportunity arises. Remember that if there’s no need to make a transaction, then don’t transact. Become an Investor, and not a Trader.
“The foundation of the post-pandemic rally -- ultra-low interest rates and monetary stimulus -- has crumbled. In its place now stand elevated borrowing costs and tighter financial conditions that have forced investors into cash-preservation mode.” - Bloomberg
TINA (There is no alternative) is dead. From money market funds to short-dated bonds and floating-rate notes, low-risk returns with attractive yields are back.
According to China’s Construction Bank (CCB), it will set aside RMB30 billion to buy existing properties from developers and then renovate into rental housing. The purpose is to inject some liquidity to developers and to ensure the projects' completion.
The CCB’s announced rescue fund is probably a part of the broader-based scheme previously reported by Reuters (which indicated CCB would contribute RMB50bn as the first stage of the war-chest rescue fund that could total up to RMB200-300bn).
Chart That Caught Our Eye
Analyst Team Note:
“Money-funds, banks and others are so flush with cash these days that they’re shoveling record amounts into the Fed’s [reverse repo facility], a short-term instrument that pays a rate of 3.05%.
Looking further, there’s another $18 trillion in deposits at US commercial banks and US banks are sitting on about $6.4 trillion of surplus liquidity, or excess deposits relative to loans, up from about $250 billion in 2008.” - Bloomberg
We want to take a moment to thank Interactive Brokers for being one of our Channel’s trusted Partners and to inform my audience of the special features they have given that our online friends here closely follow Chinese Internet stocks (BABA/Tencent).
Much of Larry’s audience is concerned about the US ADR issue of Chinese Stocks being delisted.
