Markets Weekly March 9, 2024

Hello my friends, today is March 8th and this is Markets Weekly, so I'm recording this one day earlier. This past week was a pretty volatile weekend markets and it looks like we're going to close Friday down again. I'm seeing a couple things in markets that suggest caution. First, I noticed that in the middle of the week, the Nikkei futures had a 3% intraday swing. Now the Nikkei has been a huge leader in this global equity market rally and it looks like it's stumbling a bit. Most importantly, on Friday, I saw NVIDIA who is without doubt the leading general in this market rally tumble 10% intraday. So if the generals are getting tired, it to me suggests that maybe the market wants to pause a little bit. I guess we'll see how that turns out in the coming days. So today I want to talk about three things. First, we got to talk about gold. Now gold is surging to all-time highs. Let's talk about some common theories that try to explain what drives gold. Secondly, the FDIC released its latest US banking sector banking profile and it has a wealth of information on the US banking sector. Let's see what the profile says. And lastly, Fed officials and the media have been talking about this brand new paper by some noted academics on QT. Let's see what the findings of the paper are. Okay, starting with gold. Now gold, if you look at a chart of gold prices, gold has basically gone up every single day the past year, past week, and it looks like it's going to the moon. It's absolutely surging. Gold has always been something that's difficult to explain. At the end of the day, it's a shiny rock. It doesn't have earnings. It doesn't have profit. It doesn't have loss. So how do you know what to pay for it? There have been some common theories. One popular theory was real interest rates. So after the great financial crises, we saw gold surge. Now at that time, real interest rates were negative. So many people were thinking, well, if you're getting negative real rates, you might as well buy something tangible instead of let your money burn away.

大家好，今天是三月八号，这是市场周报，我提前一天录制了这期节目。过去一周市场波动较大，看起来周五又要收跌了。我在市场中看到一些需要谨慎的征兆。首先，我注意到本周中旬，日经期货有3%的日内波动。现在日经已经在这次全球股市反弹中发挥了重要领导作用，看起来有点摇摇欲坠。最重要的是，周五，我看到了英伟达，无疑是这次市场反弹中的引领者，盘中暴跌了10%。所以，如果主力军开始疲劳，我认为市场可能想要稍事停歇一下。让我们拭目以待接下来的几天会怎样。今天我想谈论三件事情。首先，我们必须谈谈黄金。现在黄金涨势已创历史新高。让我们探讨一下几种解释黄金涨势的常见理论。其次，美国联邦存款保险公司发布了最新的美国银行业概况报告，其中包含了丰富的关于美国银行业的信息。让我们看看这份报告说了些什么。最后，联邦储备委员会官员和媒体一直在谈论一篇由知名学者撰写的关于紧缩量化的全新论文。让我们看看这篇论文的研究结果。好的，先从黄金开始。现在黄金，如果看一下黄金价格的图表，可以看到过去一年、过去一周，黄金基本上每天都涨，看起来要冲向月球了。黄金一直是一个难以解释的东西。最终，它只是一块闪闪发光的石头。它没有盈利，没有利润，没有损失。那么你怎么知道它值多少钱呢？有一些普遍的理论。一个流行的理论是实际利率。在大萧条之后，我们看到黄金飙升。那时，实际利率是负值。所以很多人认为，如果你得到了负的实际利率，不如把钱投资在有形资产上，而不让钱消耗殆尽。

Now, if you look at real interest rates today, say based on 10-year tips, you can see that real interest rates slightly below 2% and historically quite high. So this real interest rate estimation doesn't work for the price surge. What about money printing? No, after the great financial crisis, people were always very keen to say, well, the Fed is expanding their balance sheet doing QE, so we got to buy gold. But of course, the Fed is doing QT and shrinking its balance sheet. So that doesn't work either. One other way of thinking about gold is as a currency. So in that case, well, how's the dollar trading looking at the broad Dixie, the Dollar Index, it looks like the dollar has been taking a bit of a tumble the past few weeks, weakening notably against the euro and the pound. So maybe the weakness in the dollar has been one possible explanation for the surge in gold, although as you can see, dollar has been weakening modestly, but the surge in gold is pretty exceptional.

现在，如果你看一下今天的实际利率，比如基于10年期通胀保值债券，你会发现实际利率略低于2%，在历史上是相当高的。因此，这种对实际利率的估计并不能解释黄金价格的激增。那么货币印制呢？不，在大规模金融危机后，人们总是很热衷说，嗯，美联储正在扩大其资产负债表，实施量化宽松，所以我们必须买黄金。但当然了，美联储正在实施量化紧缩，缩减其资产负债表。所以这也不成立。另一种看待黄金的方式是作为一种货币。因此，在这种情况下，美元在广义美元指数（Dixie）交易方面的表现如何，看起来美元在过去几周有所下跌，明显对欧元和英镑贬值。因此，美元贬值可能是黄金激增的一个可能解释，尽管你可以看到，美元贬值幅度不大，但黄金价格的激增非常显著。

Now another common lens in looking at gold is through the lens of geopolitics. Gold is really unique in that it's an asset without a counterparty. Now what does that mean? So if I have deposits at a bank, well, the bank is my counterparty and the bank could potentially default on me. For example, I could go to the bank ask for my money and the bank could say, sorry, I've going bankrupt. I'm going to become like Silicon Valley bank. Or maybe if I hold Treasury securities, my counterparty is the US government and maybe the US government doesn't like me and so they decide to freeze my Treasury securities. So gold is a good hedge against government. Now if we are in the world with we're increasing political instability, then I think gold is probably going to be an attractive asset, not necessarily for individuals, but definitely for governments. So one of the common stories we've been hearing over the past several months is that central banks, foreign central banks have been buying gold. And we do have reports say China, for example, continuing to buy gold. And as we all know, they have trillions of US dollars and a relationship with the US that is sometimes tense. So it totally makes sense for them to buy some gold and maybe other sovereigns as well. Now the macro backdrop as we see based on the most recent data seems to suggest that the Fed is going to be cutting rates maybe as soon as June as well. So you know, you do have this macro backdrop where we are in an easing cycle and you do have positive risk appetite. And if you look at an asset that's some people think is related to gold, some people call it digital gold, Bitcoin. You can see that Bitcoin has been surging to all time highs as well. So maybe the air traders who view these assets as similar and are also piling into gold. In any case, oftentimes what happens is that the price moves and people explain a theory or find a theory to explain it. So from my perspective, weakening dollar, well, not just weakening dollar, but all currencies weakening as well as geopolitical risks to me make suggest to me that gold probably has further to run. And maybe you can run up a lot in the coming years. It's just my personal view.

现在，另一个查看黄金的常见视角是通过地缘政治的视角。黄金真的非常独特，因为它是一种没有交易对手的资产。那么这是什么意思呢？如果我在银行存款，那么银行就是我的交易对手，银行可能会违约。例如，我去银行取钱，银行可能会说，抱歉，我要破产了，我将成为硅谷银行。或者，如果我持有国债，我的交易对手是美国政府，也许美国政府不喜欢我，所以决定冻结我的国债。因此，黄金是对政府的一个很好的对冲。现在，如果我们处于政治不稳定不断增加的世界，那么我认为黄金可能会成为一种有吸引力的资产，不一定是对个人，但肯定是对政府。我们过去几个月听到的一个普遍故事是，中央银行，外国中央银行一直在购买黄金。我们也听说中国继续购买黄金，并且众所周知，他们拥有数万亿美元，与美国的关系有时紧张。因此，他们购买一些黄金以及其他主权国家也是完全有道理的。现在，根据最新数据，宏观背景似乎暗示着联邦储备委员会可能会在6月份甚至更早降息。所以你知道，在这种宽松周期中，你有积极的风险偏好。如果你看看一种某些人认为与黄金相关的资产，有人称之为数字黄金，比特币，你会发现比特币也一直在创纪录高位。也许那些视这些资产为相似的空头交易者也在疯狂地购买黄金。无论如何，经常发生的情况是价格波动，而人们解释一个理论或找到一个理论来解释它。从我的角度来看，美元贬值，不仅美元贬值，所有货币也在贬值，以及地缘政治风险，这些都让我觉得黄金可能还有更多的上涨空间。也许在未来几年里可能会涨得很多。这只是我的个人观点。

Okay, secondly, let's talk about what the latest FDIC banking profile is saying. Now, as you recall, last March, we had a panic in regional banks, which from my perspective has always been something that has been localized. And over the past year, I've been telling you guys in many videos that the US banking sector is totally fine. It's just that we have 4000 banks. And if you have 4000 of anything, you're going to have some banks that have a tough time. And this remost recent quarterly profile from the FDIC continues to affirm my beliefs. Now, first, let's look at the net interest margin for the commercial banking sector. As we all know, interest rates have gone up a lot. And some were expressing concern that, well, if the Fed is raising short interest so much, the banks are going to go bust because, well, they have their, they have interest income on assets that are longer dated, but they have to pay interest on shorted did liabilities. And that interest they pay has gone up a lot. So maybe they're getting squeezed, maybe they'll go broke. But as you can see in this data broken down by bank sizes, that's just not the case. And it's basically never been the case. So banks are sophisticated businesses. They manage their assets and liabilities well, such that when their interest expense goes up, they also find ways to either hedge that or pass it on to their borrowers.

好的，接着，让我们谈谈最新的FDIC银行概况报告。现在，正如大家所记得的，去年三月，我们在地区银行出现了一场恐慌，从我的观点来看，这一直是一个局部性问题。在过去一年里，我在很多视频中告诉大家，美国银行业完全没有问题。只是我们有4000家银行。如果你有4000个什么东西，必然会有一些银行经营困难。而最近一季度FDIC的最新概况报告继续验证了我的看法。现在，首先，让我们来看一下商业银行部门的净利息差。我们都知道，利率已经大幅上涨。有些人担心，如果联邦储备局提高了短期利率，银行会破产，因为他们拥有长期资产的利息收入，但却必须支付短期负债的利息。而他们支付的利息已经大幅上升。也许他们在被挤压，也许会破产。但从这份按银行规模划分的数据中可以看到，事实并非如此。实际上，这从来都不是事实。银行是复杂的企业。他们善于管理资产和负债，当他们的利息支出增加时，他们也会找到办法对冲或者转嫁给借款人。

And so you can see over periods of time, the net interest margins of banks are relatively stable. Now, sometimes they do go up. Obviously, when interest rates were zero, that was right after COVID, that was a pretty good time for the banking sector. But overall, these are guys know what they're doing across bank sizes. So bank income actually has been totally fine. Now, last quarter, they had to pay that FDIC special assessment. Basically, the FDIC lost a bunch of money in building out some of the regional banks. And so they imposed a special assessment on the bank system to make up for that. And so, fourth quarter of last year, the banking sector had to cough up some cash. But other than that, their income has been good. Now, let's go to credit. Now, again, you'll hear many stories about stress in credit, but, you know, that's just straight up not true. Now, when alone is goes bad, first becomes non-current, as to say that the buyer self's making its payments in at the end of the day, through a process, it finally gets charged off. That is when the bank recognizes the loss. Now, if you look at this chart of non-currents and charge offs, you can see that, yeah, it's been ticking up slightly, but it's very much within historical ranges.

因此，您可以看到，银行的净利息差在一段时间内相对稳定。现在，有时候它们确实会上升。显然，当利率为零时，那是在COVID后的时候，对银行业来说是一个非常好的时机。但总的来说，这些人知道他们在做什么，不论银行规模大小。因此，银行收入实际上一直都还不错。现在，上个季度，他们不得不支付那笔FDIC的特别评估。基本上，FDIC在发展一些地区性银行时亏损了一大笔钱。因此，他们对银行系统征收了一项特别评估以弥补这一损失。因此，去年第四季度，银行业不得不拿出一些现金。但除此之外，他们的收入都还不错。现在，让我们谈谈信贷。再次，您可能听到很多关于信贷压力的故事，但事实不是这样的。当贷款变得不良，首先成为逾期，就是说借款人没有按时还款，最终通过程序被注销掉。这时银行才认为出现了损失。现在，如果您看一下逾期和注销的图表，您会看到，是的，这些情况略有上升，但仍然非常接近历史范围内。

There is absolutely no credit concern as a whole in the banking sector. Of course, there could be individual banks that have some problem. But, of course, if you have 4,000 small business via 4,000 of any business, you're going to have a few banks that are not well managed. But overall, as you can see, things look okay.

整体而言，银行业绝对没有信贷问题。当然，可能个别银行存在一些问题。但是，如果你有4000家小企业，通过这4000家任何一家进行业务，总会有一些银行管理不善。但总体来说，正如你所见，情况还是可以接受的。

Now, a common concern that people have been having is the commercial is the commercial real estate sector. So commercial real estate, as we must remember, is a wide sector. That includes things like hospitals, includes data centers, multifamily. And, of course, it also includes office space. And we know office space, particularly in big cities, has not been doing well. Now, the FDIC has this chart that shows you basically how banks are fearing on their, I guess, commercial real estate portfolios. And overall, it's really fine with the exception of one segment that is larger banks.

现在，人们普遍关注的一个问题是商业房地产行业。因此，商业房地产，我们必须记住，是一个广泛的行业。这包括医院、数据中心、多户住宅等。当然，它还包括办公空间。我们知道办公空间，特别是在大城市，表现不佳。现在，联邦存款保险公司（FDIC）有一份图表，基本上显示了银行在它们的商业房地产投资组合上的情况。总体而言，除了一个更大的银行部分之外，情况还是不错的。

Now, the FDIC gives additional information and says that this increase in concern from larger banks is really centered around office real estate in downtown areas. So, again, very much a problem that appears to be isolated. One other thing that I would note is that in the past, there has also been concern about the unrealized losses of the securities portfolio of commercial banks. Now, the latest FDIC data shows that as rates rallied through the end of last year, there was a significant improvement in the securities portfolio of commercial banks such that a lot of these losses declined significantly. Again, when you look at this, you have to realize that there's an asset side and also a liability side.

现在，美国联邦存款保险公司提供了额外信息，并表示，较大银行对办公地产在市中心地区的担忧增加。因此，这似乎是一个局部问题。另一件我想指出的事情是，过去也有人担心商业银行证券投资组合的未实现损失。现在，最新的美国联邦存款保险公司数据显示，随着利率在去年年底反弹，商业银行的证券投资组合显着改善，许多损失都大幅下降了。再次强调，你必须意识到这里有一个资产方和一个负债方。

If you have unrealized losses on your assets, you also got to look at the liabilities as well. Maybe the liabilities are also long-graded such that when interest rates go up, well, the market value of the liability declines as well. So, if you have smaller market bios and assets and a smaller market values and liabilities, your net worth is unchanged. And I think that's what many people miss when they point to these unrealized losses.

如果你的资产有未实现的亏损，你也必须看看负债。也许负债也是长期分级的，当利率上升时，负债的市值也会下降。因此，如果你的市场资产和负债较小，净值保持不变。我认为这就是许多人指出这些未实现损失时忽略的事情。

In any case, as we can see, if you in the overall sense, the banking system continues to be fine and I expect it to continue to be going forward. Now, this past week, Chain Powell went on the hill and was subject to questioning by the House and the Senate. And one thing you'll notice is that over and over again, the Congress people were asking Jay Powell about Baso 3 Endgame, which is a suite of new regulations. Now, it looks like Jay Powell is going to be adjusting those regulations going forward to make them a little bit less onerous because they are really onerous.

总之，我们可以看到，从整体上看，银行系统仍然表现良好，我预计未来也将继续如此。现在，上周，杰伊·鲍威尔走上国会山接受众议院和参议院的询问。你会注意到的一件事是，国会议员一再询问鲍威尔关于Baso 3终极游戏，这是一套新的监管规定。现在看来，鲍威尔将在未来调整这些规定，使它们稍微减轻一些负担，因为它们实在太繁琐了。

And one way they can adjust that is to adjust how they treat the leverage ratio and treasury securities. And I think that's going to have a big impact on how the market functions. And that's what I will write about in my blog this week. And the last thing that I want to talk about is this latest QT paper by some noted academics. So we had federal officials give speeches specifically in response to this.

他们可以调整的一种方式是调整他们对杠杆率和国库券的处理方式。我认为这将对市场运作产生重大影响。这就是我本周要在博客中写的内容。我想谈论的最后一件事是一些著名学者最新的QT论文。因此，我们看到联邦官员专门就此发表演讲。

And we had many people in the media writing about it. Now, just what is this paper saying? Well, first off, this is an interesting paper in that it compares the QT experience across a number of countries. Now QT has been a global phenomenon. And so having this kind of comparison is pretty interesting. Now, what these scholars are trying to do is they're coming, try to come up with an event study to quantify the effect of QT on interest rates. Now, this is to be totally clear. There's no good way to do this. It's a really hard study to do.

媒体上有很多人在写这个。现在，这篇论文到底在说什么？首先，这是一篇有趣的论文，因为它比较了多个国家的量化宽松（QT）经验。现在，QT已经成为全球现象。因此，进行这种比较相当有趣。这些学者试图做的是通过事件研究来量化QT对利率的影响。现在，需要明确的是，没有好方法可以做到这一点。这是一项非常难的研究。

And so when we look at these results, we have to keep that in mind. It's for reference only. So first off, as we noticed, the QT is proceeding across the world and more so in some countries than others. And it's also proceeding in different ways. Some countries, for example, are selling their QE portfolio outright. And other countries have been letting it passively roll off, as is the case in the Fed.

因此，当我们看到这些结果时，我们必须牢记这一点。这仅供参考。首先，正如我们注意到的那样，量化宽松正在全球范围内进行，有些国家比其他国家更为频繁。而且它也以不同的方式进行。例如，一些国家正在出售他们的量化宽松投资组合。而其他国家则正在 passively 退席，就像联邦储备局的情况一样。

Now, the academics think that QT has a relatively small impact on yields. Now, across the country, across the world, you notice that they come up with different estimates, actually how impactful QT is. Now, notice that they think that the impact of QT on US yields is not very large. But we also have to keep in mind that it's very difficult to conduct this study as the authors admit. In the US, for example, before QT was officially announced, you have all sorts of Fed speakers leaking details and hinting on this months in advance such that when the announcement is officially unveiled, it's something the market already knows.

现在，学者们认为QT对收益率的影响相对较小。现在，在全国乃至全世界，你会注意到他们提出了不同的估计，关于QT的实际影响。现在，我们注意到他们认为QT对美国收益率的影响并不是很大。但我们也必须铭记的是，正如作者所承认的，进行这项研究十分困难。例如，在美国，在QT正式公布之前，各种美联储发言人泄露细节并提前几个月暗示，以至于当正式公布公告时，市场早已知晓这一消息。

In contrast, in other jurisdictions, QT was kind of a surprise. The central bank just basically jumped out and said, we're going to do QT. And that's what they found. They found that countries were that tended to surprise the markets, had bigger impacts, and also countries that were outright selling their government bond holdings had bigger impacts as well. So QT has an impact, but according to the study, not a very large impact on rates. Now, the study also notes that QE seems to be much more impactful than QT. And this point was also directly addressed by a couple Fed speakers.

相比之下，在其他司法管辖区，量化收紧（QT）似乎是一个意外。央行基本上突然宣布，我们要进行QT。他们发现，那些倾向于给市场带来惊喜的国家产生了更大的影响，而直接出售政府债券持有的国家也产生了更大的影响。因此，QT确实产生影响，但根据研究，对利率的影响并不是非常大。现在，研究还指出，量化宽松（QE）似乎比QT更具影响力。这一点也被一些美联储发言人直接提到。

One thing important to note though is of course, QE and QT happen in very different contexts. When QE happens, it's oftentimes when things are going really, really bad. And so having the Fed step in at these moments is really a big morale booster. And of course, when the Fed steps in these times, it's usually in size. So it should not be expected that QE and QT would be symmetric. After all, they occur in very different circumstances. Governor Waller had a very interesting illustration where he basically said, well, if your house is on fire and you delves a whole bunch of water on it to take out the fire, then when you take the water, when the water dries, would you expect the fire to come back? No, right? It's not symmetric. And so you wouldn't expect QT and QE to have symmetric impacts.

然而，值得注意的一点是，量化宽松（QE）和量化紧缩（QT）发生在非常不同的背景下。当实施QE时，通常是在事情变得非常糟糕的时候。因此，在这些时刻由美联储介入真的是一种很大的鼓舞。当美联储在这些时候介入时，通常是规模庞大的。因此不应该期望QE和QT是对称的。毕竟，它们发生在非常不同的情况下。华勒州长有一个非常有趣的比喻，基本上是说，如果你的房子着火了，你往上倒了一大堆水来扑灭火，那么当水干了之后，你会期望火又回来吗？不会吧？这并不是对称的。因此你不应该期待QT和QE产生对称的影响。

Now that being said, we also have very interesting commentary from the Twitter world showing that one reason why QT and QE have different degrees of impacts is because QE is historically much larger than QT. The Fed and central banks in general seem to be very risk-averse. So when it comes to loosening monetary policy, they're very, very aggressive. But when it comes to tightening monetary policy, they're a bit more cautious. And this asymmetry is what the market understands.

现在说到这一点，我们还可以从Twitter世界的评论中得知，量化宽松和量化收紧产生不同影响程度的原因之一是因为量化宽松在历史上比量化收紧规模大得多。联邦储备局和中央银行总体上似乎非常害怕风险。因此，当涉及宽松货币政策时，它们会非常激进。但是当涉及到紧缩货币政策时，它们则会更加谨慎。这种不对称性是市场所理解的。

And so they react much less to QT, keeping in mind that maybe QT could stop earlier than expected and that the Fed probably maybe isn't super serious. Anyway, now we're getting more communications. That suggests the Fed may actually be more serious than we expect. And I wrote about that last week when I talked about how Governor Waller is envisioning a Fed portfolio, Fed Treasury portfolio, that will have more bills suggesting more coupon roll-off even after QT ends.

因此，他们对QT的反应要少得多，要记住，也许QT可能会比预期提前停止，而联邦储备委员会可能并不是非常严肃。无论如何，现在我们得到了更多的沟通。这表明联邦储备委员会可能比我们期望的更认真。我上周谈到了这一点，当时我谈到沃勒理事正在设想一个联邦储备委员会国债组合，将拥有更多的票据，这意味着即使QT结束后，可能会有更多的票券到期。

So that's all I prepared for today. If you're interested in hearing more of my thoughts, check out my blog at FedDye.com. And if you're interested in learning more about markets, check out my online courses at centralbanking101.com. Thanks so much and I'll talk to you guys next week.

今天我为大家准备的就是这些。如果你对我的想法感兴趣，可以去我的博客FedDye.com看看。如果你想了解更多有关市场的知识，可以查看我在centralbanking101.com上的在线课程。非常感谢，下周再见。