Time flies, have been reading this blog for 5 years, have been the beneficiary of experience sharing from 簡介投資大師 to 股市隨筆 , from the useful 博奕策略 to the applicable 社交心理剖析. I just want to say your inputs have guided me making some of the most important decisions in my life (Big thank you!), and I enjoy reading your book Golden Road at the moment.
Working in the nucleus of banking ecosystem – banking group global liquidity, maybe it’s a good time to share some personal observations below:
Market Sentiment: In terrible Europe, the 2-year German bund yield dropped to -5bps (negative) which is scary – it means people pays German gov’t to keep their cash. 10yr US Treasury yield dropped 15bps on Thu and highlighted the flight to quality phenomenon. The capital flight from Spain accumulated to $80bn in the last month, and Mario Draghi were urgently meeting European banking sector CEOs regarding ‘why interbank market is important’ and ‘what prevents interbank market operation’ which is a deja-vu conversation on repo market before Lehman crisis. Moody’s possible coming downgrades of 144 banks in Europe could have hiked the collateral requirements in the interbank/ trading market, and any similar move of S&P might trigger massive interbank turbulence i.e. Morgan Stanley has to top up $9.6Bn if they are downgraded by 3 notches. Separately, Mario and European leaders are also pondering to redefine/ relax the requirements or definition of assets that qualifies for LCR ratio in Basel III. All of the above are setting up a stage for LTRO round three.
In Asia, India’s economy is clearly going south and worrisome. With U.S and European banks receding their presences in Asia, Japanese banks and South East Asian banks are taking up market shares across Asia and growing their USD asset books offshore with their main funding currencies still in JPY, SGD, MYR etc. (In other words, they raised funds locally in JPY and swapped into USD to fund offshore USD assets). This banking book currency mismatch will draw/ have drawn the attention of local regulators, and will eventually force the Japanese and SEA banks to raise more USD funding offshore/ collect a lot more USD deposits in Asia. USD liquidity in Asia could be tightening soon.
The above reasons ‘flight to quality’ and ‘USD mismatch’ could have contributed to the strong dollar in the last few weeks, and will continue. But in hindsight, in the last 2 years all of us have heard from HK property developers and property agents saying USD depreciation will trigger further rise of HK housing price, but now none of them comes out and says the other way around when USD has appreciated so much recently…….
Just a bit of sharing, could be wrong though.
祝好
So in a nutshell, my key risks assessment includes
i. Econ engine slowdown: Material India and China slowdown (hopefully China can stimulate the econ earlier than expected)
ii. Treasury bond bubble – i.e. Germany will show more flexibility and issue more eurbonds, so the overall quality of euro will deminish, and becomes a drag for Germany. However, German bunds and US Treasuries yields are going to an opposite direction
iii. Systemic risk in Europe: How ECB can contain the contagion within Greece and Spain remains a question. How will it affect the interbank / wholesale funding market stays as the biggest uncertainty on European leaders mind.
None of us wants a recession, but I am afraid one will be around the corner after the major elections in late 2012/ early March.
DPZ Blog 
Flight to Quality and USD tightening
Time flies, have been reading this blog for 5 years, have been the beneficiary of experience sharing from 簡介投資大師 to 股市隨筆 , from the useful 博奕策略 to the applicable 社交心理剖析. I just want to say your inputs have guided me making some of the most important decisions in my life (Big thank you!), and I enjoy reading your book Golden Road at the moment.
Working in the nucleus of banking ecosystem – banking group global liquidity, maybe it’s a good time to share some personal observations below:
Market Sentiment: In terrible Europe, the 2-year German bund yield dropped to -5bps (negative) which is scary – it means people pays German gov’t to keep their cash. 10yr US Treasury yield dropped 15bps on Thu and highlighted the flight to quality phenomenon. The capital flight from Spain accumulated to $80bn in the last month, and Mario Draghi were urgently meeting European banking sector CEOs regarding ‘why interbank market is important’ and ‘what prevents interbank market operation’ which is a deja-vu conversation on repo market before Lehman crisis. Moody’s possible coming downgrades of 144 banks in Europe could have hiked the collateral requirements in the interbank/ trading market, and any similar move of S&P might trigger massive interbank turbulence i.e. Morgan Stanley has to top up $9.6Bn if they are downgraded by 3 notches. Separately, Mario and European leaders are also pondering to redefine/ relax the requirements or definition of assets that qualifies for LCR ratio in Basel III. All of the above are setting up a stage for LTRO round three.
In Asia, India’s economy is clearly going south and worrisome. With U.S and European banks receding their presences in Asia, Japanese banks and South East Asian banks are taking up market shares across Asia and growing their USD asset books offshore with their main funding currencies still in JPY, SGD, MYR etc. (In other words, they raised funds locally in JPY and swapped into USD to fund offshore USD assets). This banking book currency mismatch will draw/ have drawn the attention of local regulators, and will eventually force the Japanese and SEA banks to raise more USD funding offshore/ collect a lot more USD deposits in Asia. USD liquidity in Asia could be tightening soon.
The above reasons ‘flight to quality’ and ‘USD mismatch’ could have contributed to the strong dollar in the last few weeks, and will continue. But in hindsight, in the last 2 years all of us have heard from HK property developers and property agents saying USD depreciation will trigger further rise of HK housing price, but now none of them comes out and says the other way around when USD has appreciated so much recently…….
Just a bit of sharing, could be wrong though.
祝好
So in a nutshell, my key risks assessment includes
i. Econ engine slowdown: Material India and China slowdown (hopefully China can stimulate the econ earlier than expected)
ii. Treasury bond bubble – i.e. Germany will show more flexibility and issue more eurbonds, so the overall quality of euro will deminish, and becomes a drag for Germany. However, German bunds and US Treasuries yields are going to an opposite direction
iii. Systemic risk in Europe: How ECB can contain the contagion within Greece and Spain remains a question. How will it affect the interbank / wholesale funding market stays as the biggest uncertainty on European leaders mind.
None of us wants a recession, but I am afraid one will be around the corner after the major elections in late 2012/ early March.
在1年前，我是個上班族，
利用下班後的時間兼職網上事業，
但是現在的我全職在家利用系統上網工作，
購物不需要看價錢，每周都領錢的感覺真好，
真是不可思議，實在太棒了！
真的在家就能增加收入，這是真的。
推薦給跟我一樣，想增加收入，卻懶得出門的人。
只要一分鐘，填寫資料 :[http://8win.weebly.com]
只要上網學習。你也可以跟我一樣，每個星期領錢，
想要加薪，自己來不用求老闆~