Markets Weekly June 1, 2024

Hello, my friends. Today is June 1st, and this is Markets Weekly. So today I'm in Orlando at the Rebel Capitalist Conference. Give a talk this morning on Crash Shop, had a panel with Brent Johnson and Mike Green, both big people on Twitter, and also had a podcast with Mark Moss today who was very big in the crypto sphere. So that's why I'm a little bit late today. All right, but of course I did not forget you guys and I had the chance to meet many of you. Thanks so much for being part of this channel. So today it's going to be brief, but I want to talk about three things.

你好，我的朋友们。今天是6月1日，这是《市场周报》。今天我在奥兰多参加叛逆资本家大会。早上进行了一个关于“崩盘商店”的演讲，还和布伦特·约翰逊及迈克·格林参加了小组讨论，他们在推特上都是很有影响力的人。此外，我还和在加密货币领域非常知名的马克·莫斯录制了播客。所以我今天稍微晚了一点。不过，我当然没有忘记你们，我也有机会见到了许多频道的观众。非常感谢你们成为这个频道的一部分。今天的内容会比较简短，但我想谈三件事情。

First, I want to talk about the geopolitical escalation that's happening that I don't think the market is appreciating. Secondly, so we got some new data on commercial real estate and it looks like the office segment has not yet bottom and is getting worse. And lastly, looking at the latest inflation data, it looks like, you know, the Fed inflation is slowing down, but looking just kind of at the path of the range of possibilities, I think the Fed has a pretty good chance of landing a soft landing.

首先，我想谈一下目前的地缘政治紧张局势，我觉得市场对这一点的重视不够。其次，我们得到了最新的商业地产数据，看来办公楼市场还没到底部，情况反而在恶化。最后，看最新的通胀数据，虽然美联储的通胀在放缓，但从各种可能性的角度来看，我认为美联储有相当大的机会实现经济软着陆。

Starting with geopolitical risk. So this past week we had some, I think, meaningful escalation in the Russia-Ukraine conflict. So what happened was that person Biden authorized the Ukraine to strike within the territory of Russia. Now let's just rewind a little bit. Now when this conflict began a couple years ago, everyone on TV was telling you that, you know, this is, this is going to be easy. They have sanctions on Russia or the Russians run other munitions. The merchants are just the gas station with nukes. You know, they're a little big deal, but fast forward today, all those predictions have been really, really inaccurate.

从地缘政治风险开始。这过去的一周里，俄乌冲突有了一些重要的升级。事情是这样的，拜登总统授权乌克兰在俄罗斯境内进行打击。现在让我们回顾一下。当这场冲突在几年前开始时，电视上的每个人都在告诉你，这会很容易。他们说对俄罗斯实行制裁，俄罗斯的弹药会耗尽，俄罗斯不过是个拥有核武器的加油站，不算什么大事。但是，快进到今天，所有那些预测都非常不准确。

Now looking at what the White House has done over the conflict, over the source of the conflict, the White House has basically been crossing all the red lines it's set. In the beginning, they were like, we would never send Ukraine tanks. Then they started sending Ukraine tanks. Then they said they would never send the Ukraine fighter jets. And then a few months later, they sent them fighter jets. Then they said they would never send Ukraine medium range missiles. And then they sent them medium range missiles. And all throughout this, it was always a big no-no to attack Russian territory.

现在看看白宫在这场冲突上做的事情，特别是在冲突的根源问题上，白宫基本上是一直在突破自己设下的红线。一开始，他们说不会向乌克兰提供坦克。但后来他们开始向乌克兰提供坦克。然后他们说不会向乌克兰提供战斗机，但几个月后，他们又向乌克兰提供了战斗机。接着，他们说不会向乌克兰提供中程导弹，结果他们又向乌克兰提供了中程导弹。而且在整个过程中，一直都强调绝对不能攻击俄罗斯领土。

Now they're telling Ukraine it's okay to attack Russian territory. Now I think this is a meaningful escalation of the conflict that that's not being recognized in the markets. Now my sense is that markets are not very good at understanding events that are happening across the world. Thinking back, I remember in 2020, we were all looking at the tremendous amounts of disorder caused by the pandemic in China and the market just continued to go up. It was not until much later when the pandemic spread to Italy that the market began to react.

现在他们告诉乌克兰可以攻击俄罗斯领土。我认为这是冲突的一次重要升级，但市场并未对此作出反应。我感觉市场对于全球发生的事件理解得并不很好。回想起来，我记得在2020年，当疫情在中国导致极大的混乱时，市场却继续上涨。直到疫情蔓延到意大利时，市场才开始做出反应。

So sometimes the market is not super sensitive to these big geopolitical events. So I think there's potential here for some significant escalation. Now, as we all know, there are factions in the White House who would really like to have war with Russia. They also know and we all know that President Trump is doesn't want to have war versus Russia. You know, come November, there's a 50% chance that, you know, maybe the war in Russia would be over. And so I'm guessing that the people in Washington who want war are seeing their window narrow. And so I think there's potential there for some surprise.

有时候市场对这些重大的地缘政治事件并不是特别敏感。所以我认为这里存在一些明显升级的可能性。现在，众所周知，白宫内有一些派系非常希望与俄罗斯开战。同时，他们也知道，总统特朗普不想与俄罗斯开战。到了十一月，有50%的可能性，俄罗斯的战争可能会结束。因此，我猜测华盛顿那些希望开战的人会看到他们的机会窗口正在缩小。所以，我认为这里存在一些意外的可能性。

So keep your keep an eye out for that. So personally, I found the legacy media outlets to not be accurate in there in reporting on on the conflict. I really like youtubers like Judge Napolitano has many guests that are formerly of military intelligence service or diplomatic services that have given much more candid and accurate assessments of the conflict the past year.

所以要留意这一点。就我个人而言，我发现传统媒体在报道这个冲突时并不准确。我更喜欢一些YouTube上的主播，比如Judge Napolitano，他经常邀请曾在军事情报部门或外交服务工作的嘉宾，这些嘉宾提供了过去一年里更坦率和准确的评估。

Okay, the second thing I want to talk about is we got all this new data about commercial real estate the past week. And it looks like commercial real estate is actually, okay, depending on the segment is there are segments of it that are continuing to do poorly. Now, as you all know, commercial real estate is a wide range of asset classes. You have hospitals, you have warehouses, you have retail. You have multifamily. And of course, you also have office space, which we all know is doing very poorly. Now office space is doing poorly because many people are working from home. Now, some recent data shows that office space vacancies have actually continued to increase. So I've been reading headlines in the news about how a lot of companies are calling their workers back, but it looks like it has been helpful. Now in line with office space vacancies increasing, you also can see from this chart that office come from office spaces has been declining negative growth. It looks like that that's some continued stress and office space still had to be found at bottom.

好的，我想谈的第二个事情是我们在过去一周收集到了很多关于商业地产的新数据。看起来商业地产的情况其实还可以，但这要取决于具体的细分市场。其中有一些领域表现依然不佳。大家都知道，商业地产涵盖了非常广泛的资产类别。你有医院、仓库、零售业，还有多家庭住宅。当然，我们也知道办公空间表现得很差。 办公空间表现不佳是因为很多人都在家工作。一些最新数据显示，办公空间的空置率实际上在继续上升。虽然我看到不少新闻标题说很多公司正在召回他们的员工上班，但看起来效果并不明显。随着办公空间空置率的上升，你也可以从这个图表中看到，办公空间的租赁收入正在下降，出现负增长。看起来，办公空间市场仍然处于压力之下，还没有找到底部。

Now many people look at this and immediately think about the baking sector because about half of the commercial real estate loans are funded by the commercial banks. Now when you look at this though, the FDIC last week had their latest quarterly data and you can see that some segments of the baking sector is experiencing higher delinquencies. In this chart here, you can see that commercial real estate held by large banks that delinquency rate has risen and continues to rise. Now that's probably big banks that are heavily exposed to downtown real estate that's suffering. Now to keep in mind though, that these big banks are highly diversified and these portfolios are only a small part of their assets. The bulk of commercial real estate is actually held in smaller banks and it seems like the smaller banks are managing their risk okay.

现在，许多人看到这个问题时会立即想到烘焙行业，因为大约一半的商业地产贷款是由商业银行提供的。不过，当你查阅这些数据时，会发现联邦存款保险公司（FDIC）上周发布了最新的季度数据，显示烘焙行业的一些分部门出现了更高的违约率。在这张图表中，你可以看到大型银行持有的商业地产的违约率已经上升，并且还在继续上升。这可能是因为那些大型银行在市中心房地产上的投资过多而面临困境。不过，值得注意的是，这些大型银行业务高度多样化，这些贷款组合只是它们资产的一小部分。而实际上，大部分商业地产是由小型银行持有的，似乎这些小型银行在风险管理方面表现得还算不错。

Now just taking a step back, looking at the baking sector as a whole, the FDIC's update shows that as a whole baking sector loans, delinquencies, charge offs continue to be very well managed. Looking at this chart, it doesn't really seem like there's anything to be concerned about. Now the banks have had a couple years to negotiate, to modify the loans and so forth. So I really don't expect this to be something that's going to blow up. Again, we have to be careful not to fight the last war.

现在，让我们退一步，整体来看一下烘焙行业。根据FDIC的最新更新显示，整个烘焙行业的贷款、逾期和冲销都得到了很好的管理。从这张图表来看，似乎没有什么值得担忧的地方。这些银行已经有了几年的时间来协商和修改贷款等。因此，我真的不认为这会成为一个大的问题。同时，我们必须小心，不要再犯过去的错误。

Now the last thing I want to talk about is it looks like the Feds chances of landing a soft landing are getting better. So we got the latest inflation prints the past week. Again, inflation's still too high, but it came on spot. So PC was basically exactly as estimated showing inflation is probably stabilizing somewhere between two and a half and three percent. That is higher than the Feds target, but it doesn't look like it's accelerating right now. Now there's some interesting work done by the Fed where a bunch of researchers basically go and they look at a whole bunch of scenarios throughout the developed world where central banks, not just the US, just develop market central banks have begun easing and looking at the context where they start to ease what just how many episodes ended up being inflation under control of those, how many ended up being a soft landing, which is to say inflation under control and no recession.

现在我最后想谈的事情是，美联储实现“软着陆”的机会似乎在变大。我们在上周刚刚得到了最新的通胀数据。虽然通胀仍然过高，但数据基本符合预期。因此，核心个人消费支出（PCE）基本上和估计的一致，显示通胀可能在2.5%到3%之间稳定下来。这个数字高于美联储的目标，但看起来目前并没有加速上升。 有一些美联储进行的有趣研究，一些研究员们分析了全世界发达国家的各种情景，不只是美国，而是所有发达市场的中央银行何时开始放松货币政策，并研究这些情景的背景。这些研究显示了有多少次通胀得到控制，以及多少次实现了软着陆（即通胀得到了控制且没有出现经济衰退）。

So the state has acted super interesting because you can see that out of the 149 episodes that the researchers found only 25 were inflation abating. What that means is that the central bank is cutting not because the economy is in trouble and the Fed central bank wants to go and support the economy, but because inflation is coming down and so the central bank figures that it can door interest rates. So most of the time throughout history, when the central bank cuts, it's the boost growth and we've seen that over the past 20 years, right? So financial crisis, again, growth hit unemployment up, Fed cuts to ease. March 2020, we had a huge shock to the economy. Fed cuts to try to boost growth lower the unemployment rate, but this time around, it's different. Fed is thinking about cutting not because they want to boost growth, not because of unemployment, but because inflation has come down.

所以这个情况非常有趣，因为研究人员发现的149个案例中，只有25个是旨在抑制通货膨胀的。这意味着央行降息并不是因为经济出现问题，需要通过降息来支持经济，而是因为通货膨胀正在下降，所以央行认为可以降低利率。大多数情况下，历史上央行降息是为了促进经济增长，我们在过去20年里也看到了这一点。例如，金融危机时，经济增长受打击、失业率上升，联邦储备银行就降息以缓解情况。2020年3月，我们遭遇了巨大的经济冲击，联邦储备银行也通过降息来促进经济增长、降低失业率。但这次情况不同，联邦储备银行考虑降息不是为了促进经济增长或减少失业，而是因为通货膨胀已经下降。

So this current episode we're in is one of these fewer 25 inflation abating episodes. Now, when you look at 25 invasion, baiting episodes, roughly half of them end up in inflation failures. What that means is that the central bank, Lord rates and inflation came back up. So the central bank end up having to hike again. But in a little less than half of the time, they actually were inflation successes where inflation came down steadily to the 2% target. So right now we are in the inflation abating scenario and given that there's a good chance that the Fed, you know, based on these examples, will get inflation back towards their target. Again, I don't personally believe that, but I could be wrong.

所以，我们当前的这一阶段是少数25个通胀缓解的阶段之一。现在，当你观察这25次通胀缓解的情况时，大约有一半最后都失败了。这意味着中央银行降息后，通胀又回升了，所以中央银行不得不再次加息。但在不到一半的情况下，这些缓解是成功的，通胀会稳定下降到2%的目标。所以，目前我们处在通胀缓解的阶段，根据这些例子来看，美联储很有可能将通胀重新控制在他们的目标范围内。虽然我个人不太相信这一点，但我也可能错了。

Now, the last thing to look at is if you get inflation under control, what percentage of the time was it because you pushed the economy into recession. And so that ended up, you know, getting inflation under control or what percent of the time was at a soft landing where inflation came down, but growth did not suffer. Again, of the 11 inflation successes, it looks like about half of them were actually soft landings.

现在，最后要看的问题是，当你成功控制通货膨胀时，有多少次是通过让经济陷入衰退来实现的。因此，这样做可能确实控制住了通货膨胀。还有多少次是通过“软着陆”来实现的，即通货膨胀下降了，但经济增长没有受到影响。再次回顾11次成功控制通货膨胀的案例，大约有一半是“软着陆”。

So right now, I think the Fed's chances just according to this, you know, are much better than what people thought earlier. I know earlier, many people, I'd say two years ago, everyone was saying that a soft landing totally unrealistic. But as we go through this process, inflation has come down and maybe it just really does get down slowly and maybe growth does hold up. So we'll see.

所以现在，根据这一点，我认为美联储的机会比以前人们想象的要好得多。我知道早些时候，大约两年前，很多人都说软着陆完全不现实。但是随着这一过程的推进，通货膨胀已经下降了，也许真的会慢慢降下来，或许经济增长也会保持稳定。我们拭目以待。

Again, I continue to think that inflation will say higher than the Fed's target, but they will be cutting rates because unemployment rises not because of weak growth, but because of the increasing supply for migration. Anyway, so again, today was relatively short. Again, I've been a busy day for me, but thanks so much for tuning in and I will be back next week for markets weekly. Talk to you all next time. Thank you.

再说一次，我还是认为通货膨胀率会高于美联储的目标，但他们会降息，不是因为经济增长疲软，而是因为移民增加导致的失业率上升。总之，今天的内容比较短。这一天我一直很忙，非常感谢大家的关注。我下周会回归市场周报节目。下次再见，谢谢。