Markets Weekly October 26, 2024

Hello my friends, today is October 26th and this is Markets Weekly. So this past week was another good weekend markets. We even had the NASDAQ make new all-time highs on Friday although briefly. Not just that, as of this morning, it seems like the Israel did their retaliatory strike against Iran and it was very limited and well managed. So maybe that tail risk is behind us. In any case, today let's talk about three things.

你好，朋友们，今天是10月26日，欢迎收看《市场每周》。过去这一周，市场表现不错。甚至在上周五，纳斯达克指数短暂创下了历史新高。不仅如此，截至今天早上，以色列对伊朗进行了有限且有控制的反击行动，所以这个潜在的风险可能已经过去了。无论如何，今天我们来谈谈三件事情。

First, this past week we had the big BRICS Summit held in Russia and they talked about ways to potentially create a new financial system that circumvents the dollar. Let's hear their plans. Secondly, the IMF the past week released their new fiscal monetary report and they're highlighting the very very dire financial position of the United States. Let's see what they're saying and what they propose as potential fixes. And lastly, it looks like home buyers in the US finally finally are getting some reprive because according to many metrics, homes in many metro areas are becoming slightly more affordable although still much less affordable than pre-pandemic.

首先，上周我们在俄罗斯召开了大型金砖国家峰会，他们讨论了可能创建一个绕过美元的新金融体系的方法。让我们来看看他们的计划。其次，国际货币基金组织上周发布了新的财政货币报告，重点强调了美国非常严峻的财政状况。让我们看看他们的说法和提出的潜在解决方案。最后，美国的购房者似乎终于得到了一些喘息机会，因为根据许多指标显示，许多大都市地区的房价略微变得更加负担得起，尽管与疫情前相比仍然不那么实惠。

Let's talk about what's happening there and what might need to occur to make homes affordable again to the average American. Okay, starting with BRICS. So BRICS is basically a collection of middle and low income countries. It's like a club for them to talk about their own interests and this is in contrast to the G7 which is largely wealthier and Western countries. Now this year BRICS was hosted in Russia and you have to know and center they're going to be concerns about the international financial system.

让我们谈谈那里发生了什么，以及如何让普通美国人能够负担得起住房。首先，从“金砖国家”说起。金砖国家基本上是由中低收入国家组成的一个联盟，就像一个俱乐部，供这些国家讨论它们自己的利益。这与主要由富裕的西方国家组成的七国集团形成了对比。今年的金砖国家会议是在俄罗斯举办的，你需要知道，人们将关注国际金融体系的相关问题。

As we all know, not too long ago, Russia was kicked out of the dollar system, kicked out of Swift and so global trade for them has been more difficult. Now internationally, most international trade is conducted in dollars. So if you can transact in dollars, then it makes your life more difficult and we hear that Russia is conducting more transactions in RMB but I'm sure the life would be easier if they had access to dollars. So if you transact in dollars, no matter where you are at the world, you are basically using the US financial system and the US government has leverage over you.

众所周知，不久前俄罗斯被踢出了美元体系和Swift系统，使得他们的全球贸易变得更加困难。目前，大多数国际贸易都是以美元进行的。所以，如果你无法使用美元进行交易，生活就会更加艰难。据说俄罗斯现在更多使用人民币进行交易，但他们如果能使用美元，生活会更容易一些。无论你在世界的哪个地方，只要用美元交易，实际上就是在使用美国的金融系统，这也意味着美国政府对你有一定的影响力。

Let's talk about how this might work in an example where a Japanese company buys something from an Indonesian company. Now these two parties have nothing to do with the US but more often than not, their transaction will be in dollars. So the Japanese company, they would have an account at a Japanese bank with dollars. And the Japanese bank of course would have an account at an American bank holding the Japanese banks dollars. And that American bank would have an account at the Fed holding its dollars. Now looking to the Indonesian bank, now the Indonesian company would have an account at an Indonesian bank which would in turn have an account at a US bank which would in turn and have an account at the Federal Reserve.

让我们谈谈这种情况是如何运作的，以一个日本公司从印尼公司购买商品的例子为例。虽然这两个公司和美国没有直接关系，但他们的交易通常是用美元进行的。日本公司会在一家日本银行开设一个美元账户，而这家日本银行会在一家美国银行开设一个账户来持有这家日本银行的美元，而这家美国银行又会在美联储有一个账户来持有其美元。现在来看印尼方面，印尼公司在一家印尼银行有一个账户，这家印尼银行又在一家美国银行有一个账户，而这家美国银行则在美联储有一个账户。

So this whole web of relationships is called corresponded banking. So in international trade, when you use the dollars at the end of the day, the transactions are going to be settled at the Fed through a US bank. So because of that connection, the US government can really make your life difficult if it does not like you. So there have been many attempts to try to find a way around this because no country, no matter whether or not your friends with the US, wants another country to have leverage over them. After all, what if the US just says, do this or I will make your life difficult with the dollar then that's going to hurt your economy.

所以，这整套关系网络被称为代理银行关系。在国际贸易中，当你使用美元进行交易时，最终这些交易会通过一家美国银行在美联储结算。因此，由于这种连接，美国政府可以在不喜欢某个国家或地区时给它制造麻烦。因此，许多国家尝试寻找替代方法，因为不管你和美国是否友好，没有一个国家希望被另一个国家掌握控制权。毕竟，如果美国说“照我说的做，否则我会用美元来让你的日子不好过”，那将会对你的经济造成伤害。

Now there are also though, of course, in bricks, many smaller countries who are just far from these great power politics and don't really care about them. Now recently there's a paper released in Russia with involvement of the Russian government basically making the pitch to all members and bricks as to why you should try to have the financial system that is different from the dollar one we have today. Now in that paper, there's this very interesting chart where they say that, hey guys, you trade a lot with each other. But when I look at the financial flows, all of that money you make trading with each other, that all flows to the developed countries.

现在当然，在金砖国家中也有许多较小的国家，它们远离大国政治，对此并不太关心。最近，俄罗斯发布了一篇论文，其中有俄罗斯政府的参与，向所有成员和金砖国家宣传为何应该尝试建立一个不同于现有美元体系的金融系统。在这篇论文中，有一个非常有趣的图表，他们指出：“你们之间的贸易非常频繁。但当我查看金融流向时，你们通过相互贸易赚到的钱最终都流向了发达国家。”

It flows to the US to buy Treasuries, to buy Nvidia or something like that. If we have a different financial system, maybe that money could stay in your own country and finance development in your own country. You know, that would be so much better for you. So what is this different financial system they're proposing? Well, first off, what they're not proposing, no new reserve currency. So their thinking is that, hey, reserve currency is a thing of the past. Today, markets are much quicker, much more liquid, much cheaper. I can look at my screen and immediately get quotes for any currency pair.

这笔资金流向美国，用于购买国债、英伟达等股票。如果有一个不同的金融体系，或许这些钱可以留在本国，用于本国的发展。你知道的，那会对你更有利。那么，他们提出的是什么不同的金融系统呢？首先，他们并不提出创建新的储备货币。他们的想法是，储备货币已经是过去式。如今，市场更迅速、流动性更强、成本更低。我可以看着屏幕，立即获得任何货币对的报价。

So we don't really need to have that reserve currency stuff that we did in the past simply because of bounces in markets and in technology. So in any case, there's no chance that they could create a new reserve currency. The dollar is still super, super dominant. But what they want is two things. One is a decentralized current, decentralized financial system where you can pay and local currency into a new clearinghouse called BRICS Clear. Let's talk about their decentralized payment system first. Now, going back to that example of a Japanese company buying something from an Indonesian company, again, many, many layers. There's a long chain of correspondent responded baking relationships and ultimately, it's within the control of the US.

因此，我们并不真的需要像过去那样拥有储备货币，因为市场和技术的变化。无论如何，他们无法创建一种新的储备货币。美元仍然占据绝对主导地位。但他们想要的是两件事。第一是一个去中心化的金融系统，通过一个名为“金砖结算”的新结算所用本地货币进行支付。先来谈谈他们的去中心化支付系统。再举个例子，一个日本公司向一个印度尼西亚公司购买商品，这中间涉及到许多层级。这个过程包括一个冗长的关联银行关系链，而且最终受美国控制。

So both it's cumbersome, which makes it expensive, and also it's centralized within the US financial system. Now, what they're proposing sounds a lot like what's something similar to Project Enbridge, which is a technology being developed by the Bank of International Settlements, which some of the BRICS nations participated in demoing. So what Project Enbridge or something like that is, again, BRICS may not use Project Enbridge, but it sounds a lot like something like Project Enbridge. It's basically a huge decentralized ledger system where commercial banks would all be on part of the ledger. So going back to my example, the Japanese bank would have an account on this decentralized ledger and the Indonesian bank would also have an account on the decentralized ledger, and so they can trade directly with each other through this common decentralized ledger. And because it's decentralized, it's a lot harder to kick anyone off. And because it's decentralized as they trade directly with each other, they can also trade in local currency. Maybe the Japanese company, when it wants to buy something, can send over yen and the Indonesian seller. If it doesn't want yen, again, their argument is, you can simply sell yen and buy another currency. Markets are very liquid and cheap today.

因此，这个系统既繁琐又昂贵，而且集中在美国的金融体系内。现在，他们提议的方案听起来很像一个类似于“Project Enbridge”的项目，这是由国际清算银行开发的一项技术，一些金砖国家（BRICS）曾参与其展示。Project Enbridge或类似项目实际上是一个巨大去中心化账本系统，其中所有商业银行都在这个账本上有自己的部分。回到我之前的例子，日本银行会在这个去中心化账本上有一个账户，而印度尼西亚的银行也会在这个账本上有一个账户，因此他们可以通过这个共同的去中心化账本直接进行交易。由于它是去中心化的，要将任何人从中移除就变得困难得多。而且因为去中心化，他们可以直接以当地货币进行交易。比如，日本公司如果想购买某样东西，可以用日元支付，而如果印尼的卖家不需要日元，他们可以简单地出售日元，购买其他货币。如今的市场非常流动，而且交易费用也很低。

So their vision is not a new reserve currency structure. It's just this huge, huge, new decentralized structure where everyone trades in their local currency, don't need to have anyone try to control what they do financially. Now, in conjunction with this is their second proposal, something called BRICSClear, which is a clearing house for BRICS. What is a clearing house? So if you, clearing houses is basically what people use when they want to settle securities transactions. So if I want to buy a treasury security, I would have an account on the, okay. So not me personally, but in sophisticated institutions would have an account at the clearing house and the clearing house would also have, and the seller of the security would also put the treasury security in the clearing house's database.

他们的愿景并不是建立一个新的储备货币结构，而是创建一个巨大的去中心化结构，让每个人都能用自己的本地货币进行交易，不需要有人试图控制他们的金融活动。与此相关的是他们的第二个提案，叫做BRICSClear，这是为金砖国家设立的一个清算所。那么，什么是清算所呢？清算所基本上是人们用来结算证券交易的机构。例如，如果我想购买国债，我或者更高级的机构会在清算所开设账户，卖方也会将国债放入清算所的数据库中进行处理。

And so the clearing house, once it sees that the seller of the security, deposits the treasury, the buyer of the security, puts the money in the clearing house's account, the clearing house then would swap. So give ownership of the security to the buyer and again, send over the money to the seller. So it's this organization that facilitates clearing and settlements and minimizing counterparty risk. Now, notice that in the past, when the US went after the foreign reserves of Russia, some of that involved freezing the securities that Russia held in clearing houses, say, you're all clear. So again, it's in the Russian interest again. They're thinking about trying to create a world where they can't be sanctioned.

清算所的作用是这样的：当清算所看到证券的卖方存入国债，买方将资金存入清算所的账户后，清算所就会进行交换。也就是说，将证券的所有权给买方，并把资金转给卖方。因此，清算所是一个促进清算和结算、并尽量减少对手方风险的机构。注意，在以前，美国对俄罗斯的外汇储备采取行动时，其中一些操作涉及冻结俄罗斯在清算所持有的证券。所以，这与俄罗斯的利益有关，他们在考虑如何创建一个不受制裁的世界。

So they're thinking that maybe if we have this new independent clearing house, that's not under the Western powers, maybe they won't have their securities frozen so easily. But again, that can't just be the pitch. So the pitch is of course, if you have a BRICS clearing house, maybe you could issue more debt in your local currency. And so again, trying to build a robust financial system, that's not just dollar based, but maybe we can have capital markets, again, the buying and selling of debt in your local currency as well and a BRICS clearing house could help that. Now having a new clearing house again, very difficult thing to do. Right now odds are against it, dollar is too very dominant. But again, this could potentially be the beginning of something new and where there's a will, there's a way. Let's see how it develops in the coming years. Very difficult, of course, but not impossible.

他们在想，也许如果我们有一个新的独立清算所，不受西方国家的控制，那么他们的证券就不那么容易被冻结。但这不仅仅是个想法。当然，如果有一个金砖国家的清算所，可能就可以用本国货币发行更多债务。这样一来，就能建立一个不仅仅依赖美元的强大金融系统，也许还能够实现用本国货币进行买卖债务的资本市场，而金砖国家的清算所可能有助于实现这一点。要建立一个新的清算所确实非常困难，因为目前美元的地位非常强势。但这可能是新事物的开始，有志者事竟成。让我们看看未来几年会如何发展。当然，这很困难，但并非不可能。

All right, the next thing that I wanna talk about is the latest IMF fiscal report. So the IMF fiscal report is basically a report that talks about the fiscal situations of governments throughout the world and in the due this twice a year and in the previous fiscal report, they kind of highlighted how the Chinese and the US's fiscal situation is not good. Well, this issue comes up with some new graphs that highlights just how not good it is, especially for the US. Now here's a forecast of the debt to GDP for many countries. Now notice that for the sample, looking at the quartile ranges, it's okay, it's kind of wobbling, it's not great, but look at the red line there. That's the projection for the United States, the debt to GDP for the future.

好的，接下来我要谈一下最新的国际货币基金组织（IMF）财政报告。这个报告主要讨论世界各国政府的财政状况，每年发布两次。在上一次的财政报告中，他们特别指出中国和美国的财政状况不太好。最新的报告中引入了一些新图表，进一步突显了这种“不太好”的情况，特别是对于美国。这里有多个国家的债务与国内生产总值（GDP）的预测。注意一下样本中的四分位数范围，可以看到整体情况还算过得去，有些波动，但不是特别理想。不过请留意那条红线，那是关于美国未来债务与GDP比率的预测。

And it looks like it's going to the moon. It's just so, so much higher than everyone else. As we all know, the fiscal situation in the US is not sustainable and depending on what happens at this election, maybe it will become even more unsustainable. There are projections that suggest that our new Trump presidency could increase the deficit on top of its current estimates, an additional several over 10 trillion. So the US fiscal situation is unlike those of any other country.

看起来它正在直冲云霄，比其他国家都高出很多。我们都知道，美国的财政状况不可持续，根据这次选举的结果，可能变得更加不可持续。有预测建议，如果特朗普再次当选总统，可能会在现有估算的基础上，额外增加超过10万亿美元的财政赤字。因此，美国的财政状况与其他国家截然不同。

Now then, now in addition to this, they also made an interesting point that when you're estimating this fiscal deficit, it's not all about what's on the books. A lot of things happen that are often hidden. And what do they mean by this? Well, stuff happens that you don't foresee. And so when that happens, the fiscal deficit gets even larger as governments react to it. Now, a common example they give is problems with the baking sector. If you have problems with the baking sector, what happens is that the government jumps in to try to stabilize everything. And the way they do that is through big bank bill outs that add to the deficit.

现在，他们还提出了一个有趣的观点，就是在估算财政赤字时，不仅仅是账面上的数字。有很多事情经常被隐藏。那么，他们什么意思呢？事情的发生往往出人意料，而当这种情况发生时，政府为了应对可能会导致财政赤字进一步扩大。一个常见的例子是银行业的问题。如果银行业出现问题，政府会出面稳定局势，而这通常是通过大规模的银行援助来实现的，这将增加赤字。

But it could be anything else as well. Let's say, for example, maybe you have a recession and maybe the government comes up with these new programs, STEMIs or something like that to stabilize that. Or maybe you have another added elsm, disaster that requires unforeseen spending. So there's a lot of these unforeseen things that are not even in the official legislation and so forth that could jump out and get you. And to be clear, in the US, when we make fiscal forecast, it's based on the current numbers. If we have a recession, that could really jump up much higher.

这句话可以翻译为：但这也可能是其他任何事情。比如说，可能会出现经济衰退，政府可能会推出一些新的计划，比如STEMIs之类的来稳定经济。或者可能会有其他额外的问题，比如需要额外支出的灾难。因此，会有许多无法预见的事情，这些事情甚至不在官方立法等计划之内，可能会突然出现并影响你。需要明确的是，在美国，当我们做财政预测时，是基于当前的数据。如果出现经济衰退，数字可能会大幅上升。

So the estimates that we have for the fiscal deficit, for anyone who is likely an underestimation. So we all know this is unsustainable. What does the IMF say that we could do to fix it? Well, it's just so easy. If you look at their prescriptions, all you have to do is cut spending and raise taxes. And basically austerity, some version of austerity. And that, of course, is very, very difficult to do in the US political situation. If you listen to a president Trump or vice president Harris are saying, nobody, nobody is talking about cutting spending. Everyone wants to spend more money.

我们对财政赤字的估计很可能是低估了，所以我们都知道这种情况是不可持续的。那么，国际货币基金组织（IMF）建议我们可以怎么解决呢？其实很简单。如果你看看他们的建议书，只需要削减开支和提高税收，基本上就是实行某种程度的紧缩政策。当然，在美国的政治环境下，这样做是非常困难的。如果你听特朗普总统或哈里斯副总统的言论，没有人没有谈论削减开支，大家都想花更多的钱。

Now, vice president Harris talks a bit about raising taxes on the wealthiest Americans. President Trump talks about cutting taxes for everyone. So they are very far from the solution. And I think the big, big financial event for the coming years, and maybe it's not even that far away, is how this all comes to head in the global financial system. And that's what I'll think about for my blog post this week. But we'll also note that the 10-year treasury has been steadily rising the past week, seemingly in relation to the higher probability of a Trump win associated with much higher fiscal deficit.

现在，副总统哈里斯谈到对最富有的美国人加税。特朗普总统则谈论为所有人减税。因此，他们离解决方案还差得很远。我认为未来几年，甚至可能不需要那么久，最大的金融事件将是全球金融体系如何迎来这个局面。这也是我本周博客文章的思考方向。不过，我们还注意到，过去一周内，10年期国债收益率一直在上升，这似乎与特朗普胜选概率提高和更高财政赤字有关。

Okay, the last thing that I want to talk about is home prices. Now, there's some interesting work by Zillow and Bloomberg showing that home prices across many metros this year are becoming more and more affordable. There are more metros at least that are becoming affordable. And affordability is mentioned as mortgage payments as a fraction of income, where I think the expectation is, say maybe about 30% of your income is spent on mortgage payments. So, however, as we've been talking about, say, Fed cuts maybe rekindling the housing market, something interesting has also happened that mortgage rates have actually gone higher. And in line with this, we also see pretty sharp drops in home transactions.

好的，最后我想谈一下房价问题。根据Zillow和Bloomberg的一些有趣研究显示，今年许多大城市的房价变得越来越负担得起。至少有更多城市的房价开始变得可以承担。这里所说的"负担得起"意味着房贷支付占收入的比例，例如可能预期大约30%的收入用于支付房贷。然而，就像我们之前提到的，美联储降息可能会重新点燃房地产市场，但有趣的是，房贷利率实际上升高了。与此相对应，我们也看到了房屋交易量的显著下降。

Now, there's some interesting work by Fannie Mae suggesting that in order for affordability of homes today to be comparable to pre-pandemic, you have a few things that could potentially happen. Again, the measure of affordability as, say, mortgage payments with relative to income. So, for things to be more affordable, you obviously have to have lower mortgage payments to income. So, you can do that either by home prices following, say, 38%, and that would make your mortgage smaller and thus more affordable. Or you could have incomes rise by 60%. Again, that could make, again, mix it more affordable because your mortgage payment to income ratio declines. Or you could have mortgage rates come down to 2.5%, which would also shrink your mortgage payment.

现在，美国房利美公司（Fannie Mae）有一些有趣的研究表明，为了让今天的房屋可负担性与疫情前相当，可能需要发生几件事情。这里的可负担性是指抵押贷款支付与收入的比例。要提高可负担性，显然需要降低抵押贷款支付在收入中的比例。为此，你可以选择房价下降，例如38%，这会使你的抵押贷款金额变小，从而更易负担。或者，你的收入可以增长60%，这样会降低抵押贷款支付占收入的比例，使之更易负担。或者，抵押贷款利率可以降至2.5%，这也会减少你的抵押贷款支付。

Now, I think none of that is very likely to occur. So, but we could have a little bit of all of that happen to try to make homes a bit more affordable. And what strikes me is that the most likely way that we get homes to be affordable again is actually to just have a recession and have all this reset. And I know many people don't like to hear that, but again, there are costs and benefits here. If we do have a recession, I don't think we'd have home prices drop 38%, but maybe they can drop 10%, maybe they can drop 15%. And mortgage rates, again, right now it looks like they're between 6% and 7%. If we have a recession rates will come down, maybe they can get to 5% mortgage rates, right?

现在，我觉得这些情况发生的可能性都不大。不过，我们可能会在某种程度上经历这些变化，以使住房变得更为可负担。但让我印象深刻的是，实现住房再次可负担的最可能途径其实是经历一次经济衰退，重新设置一下经济环境。我知道很多人不愿听到这样的观点，但其中有利也有弊。如果我们真的经历一次经济衰退，我不认为房价会下降38%，但也许能下降10%或15%。而目前按揭利率似乎在6%到7%之间，如果出现经济衰退，利率会下降，也许可以降到5%左右的按揭利率，对吧？

Over there. Now, again, it's not going to help your income if we have a recession. And unemployment is going to rise by a few percentage points. But keep in mind that impacts not everyone, it impacts a few percent of the people. So that's a place where we would not be in a good place. But it seems like in order to get housing to be affordable, we're going to have to have movements on all three parts, home prices, income, and interest rates. A recession is probably the only way to do this. And maybe we'll have one in the coming months. We do have some interesting data that suggests the economy is slowing, although of course not yet in a recession.

在那里。现在，再次强调，如果经济衰退对你的收入没有帮助，失业率还会提高几个百分点。但请记住，这种影响并不是对所有人，而是对极少数人。所以在那种情况下，我们的处境不会太好。然而，似乎为了让住房变得负担得起，我们需要在房价、收入和利率这三个方面做出调整。经济衰退可能是实现这一目标的唯一途径。或许在接下来的几个月里我们会经历一次衰退。我们确实有一些有趣的数据表明经济在放缓，尽管当然还没有进入衰退状态。

Now, what we also have to keep in mind is that when there's a recession, the equity market will also decline. Now, that's going to help affordability because it seems like a lot of people are buying homes with cash. Now, there's this interesting work from Bloomberg, suggesting that in some markets, the percentage of cash buyers are absolutely surging. And these seem to be buyers that are in best stores, again, making a lot of money in NVIDIA or something like that, and then buying homes. If there was lower equity prices, then maybe there are fewer cash buyers as well, less upward pressure on home prices.

现在，我们还需要注意的是，当经济衰退时，股票市场也会下跌。这对房屋负担能力会有帮助，因为似乎有很多人正在用现金买房。彭博社有一个有趣的研究表明，在某些市场中，现金买家的比例正在大幅上升。这些买家似乎是那些投资者，他们在像英伟达这样的公司上赚了很多钱，然后再去买房。如果股价下跌，可能现金买家的数量也会减少，这样房价上涨的压力就会减小。

So we're in a difficult situation for home affordability, and I think the only way to get through this is a recession. And it will be painful for a few percentage of the people, but overall, it may be the way for people to have more home ownership than achieve their American dream. All right, so that's all prepared for today. Thanks so much for tuning in. And remember to like and subscribe. Talk to you guys next week.

我们现在面临房屋负担能力的问题，我认为解决这个问题的唯一办法是经济衰退。虽然这对一小部分人来说会很痛苦，但总体而言，这可能是实现更多人拥有住房并实现他们的美国梦的方法。好了，今天的内容就到这里。非常感谢您的收看。记得点赞和订阅。下周再见。