Liquidity or bottom in July

 Europe, the global liquidity crisis intensified competition for re-.5 months, China has relaxed liquidity is also Jingxian reversal highlights the unexpected shortfall. I believe that the current changes in supply and demand side of funds is not an illusion, there are deep reasons, but liquidity or in the July bottom, re-emergence of loose situation.
flow reversal mystery
2010 the subject of monetary policy is to gradually tone in the .5 in history is still loose on M2 growth, although slow further, but still 21% higher than the historical average growth rate of 3 percentage points. Meanwhile, the credit has not contracted significantly.
However, since May, ; lack of hyperlipidemia, sharp contraction in trading volume on Shanghai A shares .5 month turnover of 1.8588 trillion yuan,Bailey UGG boots, down 35% qoq. Third, the banks face tight financial situation of the discount rate by conduction to the real economy. bills discounted interest rates continued to soar, as of June 22, China's four regional semi-annual interest rate directly from the notes posted on June 1 rose 4.3% to 2.6%. Fourth, enterprise mobility weaker. M1 in May only added 259 billion yuan, compared with three or four large drop in January (new 511 billion yuan, respectively, and 451.1 billion yuan).
face of it, first of all, the cumulative means of a series of liquidity from circulation began to show marginal effect, the bank reserve ratio followed a substantial decline over .2010 on the first quarter, the excess reserve ratio of financial institutions dropped significantly, from 3.13% last quarter fell to 1.96%. estimated in June that the ratio may be less than 1.5%. Second, capital market expansion in the market hedge and lock the liquidity of a more relaxed . Once again, the real estate transaction control policy makes the housing market dropped .5 Beijing, Shanghai and sales of commercial housing on the chain, up a sharp decline both, business and residents to buy a house has been an important channel for mobile working.
deeper There are two reasons. First,UGG boots cheap, the supply of liquidity in the credit channel conversion .2009 monetary environment has a strong lead changes, the foundation put the passive currency liquidity as a new source of .2009 in the second half, base money was accelerated. Meanwhile, foreign exchange fell 54%, these mutations lead to lead to liquidity.
Second, the traditional providers of liquidity supply capacity has shrunk .6 month, the first time the state-owned commercial banks has long been the provider of funds , into the demand side. As of June 22, the state-owned commercial banks into the month, the cumulative net 947.8 billion yuan of funds, while funds last month, a total of 714.6 billion yuan of net financing. This contrasts with its asset and liability structure change. First, January sluggish .5 liability, banking deposits increased 1.08 trillion yuan RMB, while the four large state-owned commercial banks add only 147.9 billion yuan. Second, the assets transferred from short length of the structure is more obviously .5 month, four state-owned large commercial bank loans account for all long-term loans to rise further. bond configuration More importantly, on the liquidity of the market is expected to be more sensitive to changes in the extent of its faster than the liquid itself. big banks, changes in supply and demand side of funds is not false, then the excess liquidity had gone? 2009, China has increased its leverage, while the 2010 is to reduce leverage, this > On the one hand, the incremental liquidity and economic growth in general match. M2 is moderate economic growth should be a reference to judge the demand for money. China in the first half GDP growth is expected to more than 10%, while the M2 growth rate should be 20% above. CPI has entered the era of 3.0, the absorption current capabilities are further strengthened.
the other hand, shrinking ability to create liquidity on corporate loans increased by .5 376.6 billion yuan, corporate deposits increased 487.2 billion yuan. In my opinion, the Second inevitable decline in its quarterly monetary multiplier. First of all, the ability to create liquidity margin dropped significantly. From the perspective of understanding of money creation, speculative investment in real estate market is extremely active, money creation ability significantly higher than other areas of the real economy, the real estate market weakness leads to social decline in the money multiplier. Furthermore, the improvement of credit standards make less debt capacity of economic agents.