Volume 7 I've Been Here Chapter 1012 Interest Animals
Erman Rolland sorted out his thoughts and said: "In 1993, severe cold weather in the United States caused food prices to rise, and the PMI (Purchasing Managers Index) rose from a low of 49.6% in June 1993 to 56% in January 1994 as the economy recovered.
From the low point in September 1993 to the first rate hike, the agricultural product price index rose by 16.9%, industrial metal prices also rose by 19.1%, and crude oil basically stabilized. Although the CPI (Consumer Price Index) did not rise as a result, the Federal Reserve believes that economic growth and food raw material price pressures may push up inflation.
In February 1994, after the interest rate hike began, agricultural product prices fell and the growth rate of industrial metals slowed down for a time. However, energy prices began to rise at this time, rising 16.8% from the low point to the third 25BP interest rate hike.
In May 1994, oil prices and industrial metals continued to rise, and the Federal Reserve accelerated interest rate hikes by 50BP.
Although the CPI is still not high, with the CPI in April before the May meeting rising by 2.5% year-on-year, the same as in March, the cumulative increase in oil prices has reached 26.6%, while industrial metals surged again and hit new highs before the May rate hike.
Federal Reserve members are concerned that monetary policy, which is still not tight enough, may still push up resource prices, leading to new inflation risks. Therefore, accelerating interest rate hikes is intended to eliminate the loose environment under the still very low short-term real interest rates.
In August 1994, oil prices and industrial metals continued to rise, and the Federal Reserve raised interest rates by another 50BP.
Oil prices and industrial metals continued to rise before the August FOMC (Federal Open Market Committee), and the PMI fell slightly to 58%, but it was still high. Fed officials believe that the economy is still expanding rapidly, and although the economy may slow down in the near future, further measures are needed to ensure that inflationary pressures continue to be suppressed, otherwise there is a high risk of expanding inflationary pressures.
In November 1994, oil prices fell but industrial metal prices remained high, inflation rose, and the labor market was tight, so the Federal Reserve accelerated the interest rate hike by 75BP again.
Before the accelerated rate hike in November, oil prices had already fallen back, but industrial metal prices were still hitting new highs, and CPI rose to 3% year-on-year. The Fed therefore believes that the economy is still stronger than expected, and many industries are operating at above-average capacity levels. Under the influence of the previous tightening of monetary policy, the economy has indeed slowed down, but there are no signs of sustainable slowdown. In the context of high CPI and tight labor, inflation is still under pressure, and monetary policy is still not tight enough.
In February this year, industrial metals hit a new high, with a cumulative increase of 80%. The Federal Reserve raised interest rates by 50BP again: the PMI data in December 1994 fell back to 56.1%, and oil prices were basically in a consolidation trend, but the new highs of industrial metals showed that inflationary pressure has not been completely eliminated. The cumulative increase from the low point before the interest rate hike to January 1995 was 80%.
Therefore, although Federal Reserve officials believe that the economy will slow down significantly in 1995, further tightening is still necessary to achieve inflation targets, and reducing the pace to 50BP is a way to reduce the risks of an overly strict policy path, such as the impact on consumer and business confidence and the possible financial market turmoil that may result.
In addition, from the perspective of term spreads, according to "The Fed after Greenspan" written by Mishkin, who was the head of research at the New York Fed at the time, after the first three moderate interest rate hikes of 25BP in 1994, long-term Treasury bond rates and short-term interest rates rose at almost the same pace, so the term spread did not shrink significantly. This can be understood as the market does not believe in the Fed's determination to control inflation.
After the Fed accelerated its rate hikes in May, the 10-year Treasury bond rate stopped following the benchmark rate and the term spread began to narrow. After a sharp 75BP rate hike in November, the 10-year Treasury bond rate even dropped sharply, with the spread close to inversion.
The US economy has slowed down significantly this year. The unemployment rate reversed and started to rise in April, and the PMI fell into the contraction range (46.7%) for the first time in May after falling continuously since January. Although the CPI is still rising, the industrial metal prices that the Federal Reserve is worried about have also fallen since January.
The minutes of the Fed's FOMC meeting in March this year showed that participants unanimously agreed that the economy had slowed down and was on a sustainable path. Although CPI had not returned to 3%, members believed that it was more prudent to pause and assess the outlook before taking further action. Therefore, the Fed stopped raising interest rates after February.
All in all, several rate hikes achieved a soft landing for the U.S. economy, and Greenspan’s forward-looking rate hikes were successful.”
Nan Ruoyin then asked: "Why didn't the rapid interest rate hike trigger an economic recession?"
“Although the rate hike in 1994 was large and fast, against the backdrop of the previous round of substantial easing (the federal funds rate continued to fall from 8% in the early 1990s to 3%), the rate hike in this round was not very large, and the result showed that the increase in financial conditions was not large (it did not break through 0 in the end).
In addition, the preventive and rapid rate hikes also leave room for future policy adjustments. Shortly after the last rate hike in February this year, Greenspan hinted at a congressional hearing that monetary policy might be relaxed to promote economic recovery.
In addition, another key factor in achieving a soft landing is the relatively stable external environment. Major economies around the world have basically emerged from recession and are showing signs of recovery. When the Fed started its interest rate hike cycle in 1994, Germany and Japan had already emerged from recession. The Fed also mentioned the rapid recovery of the economies of industrial countries such as Japan, Germany, and France in the minutes of the FOMC meeting in July 1994.
At the same time, the North American Free Trade Agreement officially came into effect in early 1994, and the formal establishment of the World Trade Organization at the beginning of this year achieved a substantial expansion of trade under the acceleration of globalization, which to a certain extent helped the United States achieve a soft landing. "
"After the period of Volcker's inflation control in the 1980s, the Federal Reserve under Greenspan attached great importance to inflation, so it adopted a forward-looking interest rate hike framework, and decisively raised interest rates when the output gap had not yet turned positive and inflationary pressure showed signs. The benefit of this is that the economy has a better buffer in terms of momentum and space.
The success of this soft landing is due to the fact that the US monetary policy has always been very flexible, increasing and decreasing when necessary. You mentioned that Greenspan hinted at the congressional hearing that "it is possible to promote economic recovery by easing monetary policy." What he meant was that it is possible to respond in advance to the occurrence of an economic recession, that is, to cut interest rates, a preventive cut in interest rates.
At the same time, luck is also important. A stable external environment is an important guarantee for the Fed's precise regulation. In 1994, Germany and Japan emerged from recession, and the world recovered in unison; major countries reached a multilateral trade agreement, and the WTO was about to be established; Russia was still under the rule of Boris, who was pro-British and American; the maximum increase in oil prices was 47%, and the annual increase was 25%, which was still controllable.
Between 1994 and 1995, there were no major shocks to derail the soft landing the Fed was trying to achieve.
OK, that’s enough of the historical analysis. Let’s analyze the future: will interest rates be cut, when will they be cut, and what chain reactions will they cause once they are cut.”
Emman Rolland thought for a while and said: "First, the most direct impact of interest rate cuts is to reduce the risk-free capital returns. Funds are profit-seeking and very sensitive to returns. If savings are not cost-effective, they will flow out of financial institutions, providing a basis for the vitality of the entire economy, thereby driving economic activity and development.
Gold will have a short-term upward trend, and the stock market will have a longer-term trend. Combined with the rise of the Internet and the prosperity of technology stocks, the US stock market will experience a bull market for a long period of time.
Second, the yield on U.S. Treasury bonds has fallen, making it difficult for international funds to use the high interest rates on U.S. Treasury bonds to take advantage of the price difference between government bonds of different countries.
Third, it will encourage the dollar to leave the United States. A cut in the dollar interest rate is equivalent to a disguised increase in interest rates relative to other countries, which will encourage further globalization of the dollar.
Fourth, a cut in US interest rates will naturally affect the exchange rate of the US dollar, thereby causing the depreciation of the US dollar, making US goods relatively cheaper and easier to sell around the world.
Fifth, there is a certain inverse correlation between the financial capital market and interest rates, just like a seesaw, where one rises while the other falls. A rate cut will effectively stimulate financial markets such as securities, futures, foreign exchange, and precious metals.
These five points have an impact on the United States, and there are also international impacts:
First, it has greatly reduced the pressure of capital outflow from other countries. When the US dollar interest rate is lowered, the interest rates of other regions will appear higher in contrast, which is conducive to retaining international funds.
Second, it reduces the pressure on other countries to raise interest rates and even provides room for lowering interest rates, thereby alleviating the financial burden of industrial and commercial enterprises and promoting economic vitality.
Third, it will promote further activation of the global economy, release liquidity, and make the funding more relaxed. It will cause funds to flow from the United States to other countries, which will be beneficial to the stable development of industrial and commercial enterprises, real estate, and financial markets.
Fourth, the US dollar interest rate cut will affect the US dollar exchange rate, making US goods relatively cheaper and increasing competition pressure. In particular, competition for some low-end goods, such as food and raw materials, is likely to intensify.
Fifth, it will encourage more people to travel, study, and shop in the United States. The lower exchange rate of the U.S. dollar is equivalent to the appreciation of the currencies of some countries. The same money can be exchanged for more U.S. dollars. Why not do it? "
Nan Ruoyin smiled and said, "Why not, Eman, your Chinese has improved rapidly. I asked you to learn Chinese not because my mother tongue is Chinese. In fact, I grew up in an environment where Chinese, English and French coexisted. Papa has always paid great attention to cultivating my language skills.
China has great potential to become a major economy in the world. As it grows, we have many opportunities to reap the benefits. If we want to profit, we need to get close to it and understand it. Communication is the basis of everything, and language is the tool for communication. "
"The carrying pole is long and the bench is wide, but the bench is not as long as the carrying pole and not as wide as the bench. The carrying pole wants to be tied to the bench, but the bench doesn't let it be tied to it. The carrying pole insists on being tied to the bench...Haha, my tongue hurts." Emman Rolland said, sticking out his tongue.
"Ping Ping Ze Ze, Ze Ze Ping, Eman, you have something to learn, take your time. Let's go, we'll go back and make a plan." While walking with the information in hand, Nan Ruoyin suddenly said, "Eman, do you think the Backstreet Boys will become famous?"
[In 1993, after the Backstreet Boys were formed, they held a campus concert tour across the United States. In fact, college students are exposed to many things earlier than the general public.]
"Yes, I like Nick. If they have a concert, I will definitely go."
"Maybe. I prefer old guys like Simon and Garfunkel. I can feel the accumulation of time from them."
"Come on, Rachel, we are young people."
"Yeah, I'm young!"
A soft hand passed through Nan Yi's abdominal muscles, taking away his youth and leaving behind a bunch of toothpaste foam.
Nan Yi took the razor under the tap and rinsed it, then continued shaving. Suddenly, his nose twitched and he said, "Why do I feel a strange smell on the razor?"
Ruan Mei, who was brushing her teeth behind Nan Yi, said with a smile, "I couldn't find my razor the day before yesterday, so I used yours."
Nan Yi was surprised and asked, "Where are you scraping?"
"What do you think?"
Nan Yi glared at the mirror fiercely, "This won't happen again."
"No, I'm going to use your towel to clean the toilet next time." Ruan Mei pouted.
"If you continue to disgust me, I will settle the score with you one day." Nan Yi stretched out his right hand, pulled Ruan Mei's towel from the towel rack and wiped his cheeks and chin.
"Damn it, why are you using my towel?"
"Nonsense, I'm going to use mine to clean the toilet."
Ruan Mei patted Nan Yi resentfully and continued brushing her teeth.
After the two came out of the bathroom, they began to discuss where to have breakfast. Nan Yi wanted to drink porridge, and Ruan Mei wanted to eat pineapple buns. After arguing for a while, they couldn't decide who was the winner, and they were angry with each other, so they just gave up and went to have English breakfast.
On Johnston Road, opposite the Hechang Pawnshop, Nan Yi was eating the breakfast set ordered by Ruan Mei, which was decorated with girlish feelings, while his eyes were always on the Hechang Pawnshop opposite.
Hechang Pawnshop consists of 4 interconnected tenement buildings with corridor-style balconies. The building is made of wood as the basic structure, with brick walls and wooden floors. It has a terrace covered by windows. It was a popular commercial building in the past. It has a high floor and a light well. There are large French windows leading to the balcony, and a balcony corridor facing Johnston Road.
After looking at it for a while, Nan Yi turned back and said to Ruan Mei, "Do you know how old this house is?"
Ruan Mei took a look and said, "Almost a hundred years."
"The location is good and the house has a lot of history. If I buy it and renovate it, I can use it to open a distinctive restaurant."
"Yeah?"
Ruan Mei muttered, stood on tiptoe, stretched her neck and looked across.
After a while, she sat back in her seat and said to Nan Yi, "That's good. Do you have any ideas?"
"It's not that I have an idea, it's that you have an idea. If you do, get started. You can do the work yourself and I'll pay for it. The ownership will belong to you. Just consider it as compensation for my reduction of your Tony shares."
"Huh, a restaurant is worth 40% of Tony's shares?"
"Of course Tony is valuable under my control, but under your control, the entire Tony is not as valuable as the restaurant, let alone 40% of the shares. So, the responsibility is on you, not me. You should be happy that I won't hold you accountable for the years you wasted."
Nan Yi waved behind him, took an envelope from the approaching Tianxian and placed it in front of Ruan Mei, "VIP tickets for this year's Paris Spring/Summer Fashion Week. I heard that Leonardo was invited to the Versace dinner. You can go and see the handsome guy."
"Ani from "A Different Sky"? " Ruan Mei picked up the envelope and opened it to take a look.
"Um."
"Not interested, I like Gilbert (Johnny Depp)."
"Then let's look at the clothes. It's a change of seasons, so it's time to buy some new clothes."
Ruan Mei stared at Nan Yi suspiciously for a long time, and said with a gloomy face: "Xiaozi, are you compensating me? Will we not be able to see each other for a long time?"
"Ha, you're overthinking it. I didn't say I would pay for your clothing expenses." Nan Yi said guiltily.
"real?"
"uh-huh."
"Okay." Ruan Mei looked at the ticket front and back. "I haven't been to Europe for a long time. This time I'm going to Paris, and I want to go to Vienna as well."
"As long as it doesn't interfere with work, you can do whatever you want."
During the day, Nan Yi spent his time dealing with work and accompanying Nan Ruoqi. In the evening, after eating some of Nan Ruoqi's leftovers, Nan Yi went to the Ritz-Carlton Hotel to attend the cocktail party of the first summit forum of the Xiangshan Real Estate Association.
Despite the big name of the Real Estate Association, it actually does not have much influence. Not to mention the top-ranked corporate groups, even Luo Zhaohui does not join this association.
Looking through the association's membership list, it's full of companies I've never heard of. Looking at the personal membership list, I see operations managers, legal managers, assistant general managers, partners, and site directors (a position similar to a construction site manager) from a certain company everywhere.
It is rare to see titles like president, chairman and executive director. Just by looking at the company name, you can tell that the company is not that big, with perhaps only three or five people working in a factory building.
Real estate in Hong Kong is completely different from other industries. The overall pattern has been determined, and there is no possibility for a small company to slowly grow into a big company. The good land is almost all concentrated in the hands of a few wealthy people. Without land, even the Bull Demon King can only plow other people's land.
The reason why Nan Yi came here is that most of the people participating in the forum are seed players of the game of Pass the Parcel, and are also the financiers of the Pan-Nan system. Whether they can reap the benefits of the current housing market depends on the degree of concentration of the people present on the game.
Holding a glass of champagne, Nan Yi stood in a corner, looking at the people gathered in twos and threes, trying to distinguish who was from Creativity Real Estate and who was from Fang's Real Estate or GA Services. Nan Yi came here in person to gather information, so how could the three companies related to real estate speculation not send people over?
His own people could not tell them apart, but Nan Yi saw Lin Hanlie, who was standing in front of a round table with a wine glass in his hand, saying something to a woman. The woman looked to be in her forties and looked familiar. There was also a man next to the woman, who also looked familiar.
Nan Yi searched his mind but couldn't find a matching name. It was very likely that he didn't even know their names.
Under Nan Yi's gaze, the woman invited Lin Hanlie to sit down, and then introduced the strange man next to him to Lin Hanlie. The strange man was a bit flattering, and Lin Hanlie showed his humble attitude. The two people soon started chatting, during which Lin Hanlie's eyes would linger on the woman from time to time.
“Interesting.”
Nan Yi muttered and called Tianxian to his side, "Ask about the names of the couple next to Lin Hanlie."
Tianxian came back not long after she left. "Nansheng, the woman's name is Cai Kaibing, she is a female director of ATV. The man's name is Yang Jiaan, he used to be an actor at ATV, Curry Coffee, the most famous TV series he participated in was "Huo Yuanjia", he played Huo Yuanjia's eldest apprentice."
"Oh, I thought they looked so familiar. Do you know what the relationship between them is?" Nan Yi said with sudden enlightenment.
"It seems like they were lovers. The person I asked about it is not sure."
"It's okay, that's enough to know. I'm just gossiping."
After Nan Yi waved his hand to let the fairy leave, he took a closer look at Cai Kaibing. He looked above average, but considering his age, it was unlikely that Lin Hanlie would have a preference for someone of this age. Perhaps Cai Kaibing had something that Lin Hanlie needed.
When filming in Hong Kong, you can't avoid the clubs and the fees. If you can film safely, you must have a certain face in the club. When filming, you can't avoid dealing with actresses, and naturally you have to contact the financial backers behind the actresses. If the director is successful, he will accumulate a lot of connections in both the black and white worlds. This may be what Lin Hanlie values.
Nan Yi analyzed the situation in his mind, remembered the names of Lin Hanlie and Yang Jiaan, and listed them as VIPs. When the "game" came to an end, perhaps he could sell properties of suitable value to them.
"I am too soft-hearted. I only need to hold the house for seven or eight years. Once the lows are over, good times will come and you will make a fortune. I have given you the chance to make a fortune. It is up to you whether you can seize it or not. When doing business, you must be down-to-earth and don't just think about running the business with debt. Seven or eight years will pass by in the blink of an eye."
Xiangkeng is a place where land is scarce and population is densely populated, and housing prices are generally rising. As long as you are not speculating in real estate with debt, a temporary drop in housing prices will not be fatal. As long as you can survive the low period, the period of skyrocketing will always come. It is impossible to lose money by buying a house in Xiangkeng. It is just a matter of profit size.
Nan Yi stayed at the cocktail party for dozens of minutes, and when someone focused his attention on him, he left the Ritz-Carlton Hotel.
On the way back, halfway through the journey, Nan Yi felt hungry, so he asked Tianxian to find a place to have a midnight snack. Tianxian turned the car into Hennessy Road and stopped in front of a porridge stall.
After getting off the car, Nan Yi asked Tianxian, who also had not eaten dinner, to sit at the small table at the door. He ordered a casserole porridge, golden fried steamed buns, and a braised food platter. Just after placing the order, a car stopped next to Nan Yi's car. After glancing at the license plate, Nan Yi knew that Boqiong was here.
It is relatively easy to recognize people by their cars in Xianggang. Almost all wealthy families have their own exclusive license plates, which can be as short as a single digit or as long as personalized English. It does not take much brain cells to remember them all.
Seeing Boqiong get off the car, Nan Yi raised his hand and waved at him.
Looking at the other party's posture, I know that he is also here to drink porridge. Since I can't avoid him, I might as well take the initiative.
When Boqiong saw Nan Yi, he nodded slightly and walked towards him.
"Nansheng, what a coincidence."
"It's not a coincidence. I've known Miss Bo for more than ten years, and today is the second time we've met by chance." Nan Yi said, making a gesture for her to sit down.
Bo Qiong sat down opposite Nan Yi with ease, "Was it the first time on the boat last time?"
"Not really. The first time on the road, when Miss Bo was still Miss Bo, you were driving a sports car through the traffic. I was afraid of being hit by you, so I deliberately kept my car far away from you. Clay pot porridge, pork porridge base, with seafood and frogs. Are you used to it?"
Nan Yi ordered a large pot of casserole porridge, which came with the porridge base and other seafood to choose from. It was enough for three people as a midnight snack.
Bo Qiong thought about Nan Yi's words, was stunned for a while, and then replied: "I come here often and have eaten every kind of porridge."
"Oh, then you don't need to add an order. Miss Bo, just got off work?"
"Nansheng, Shixian and I have a very good relationship. You don't have to call me Miss Bo. You can just call me Boqiong."
"Okay, you can also just call me Nan Yi." Nan Yi nodded.
Bo Qiong nodded and said, "It's not that I just got off work. I was too bored and was going to sit in the bar. I didn't want to drink on an empty stomach, so I came here to eat something."
"Oh, that's a pity. I'm not very convenient today, otherwise I could have a few drinks with you."
"I understand. Shixian is not here, so you need to go back to see the child."
When Nan Yi heard this, she knew that Boqiong and Zhao Shixian had reached the level of best friends.
Although the news that Nan Yi and Zhao Shixian had a child was not strictly kept secret from the outside world, many people in Deep Water Bay and Repulse Bay had seen the two of them taking care of the child together, but they only kept it in the realm of speculation and gossip. As long as Nan Yi and Zhao Shixian did not make it clear to the outside world, no one would bring this matter up in public, especially in front of the two of them.
Since Boqiong pointed it out directly, it means that Zhao Shixian has already informed the other party about this matter.
"Yes, the child is still young, and I am rarely in Hong Kong, so I must seize the time to fulfill my responsibilities as a father."
"Nan Yi, are you usually in the mainland?"
"I have been in the mainland more in the past two years. Before that, I would fly all over the world."
Whenever Nan Yi went abroad, he had to transit in Xiangkeng. If Boqiong wanted to investigate, his general whereabouts would be unknown. Therefore, he did not deliberately conceal it and told the truth.
"Your home is in the interior?"
Nan Yi frowned. He could tell that the "home" Boqiong was asking about was not his hometown, but "the home where my wife lives."
"Shixian is an adult with sound intelligence. She knows everything she should know. As an outsider, it is inappropriate not to get involved too deeply in some matters."
Bo Qiong said self-deprecatingly: "Maybe I felt the same way. I asked something I shouldn't have asked. Sorry."
"I understand. Your story is no secret. I have heard about it. I don't know the inside story, but from an outsider's perspective, it's hard to say who is right between you and Mr. Xu."
"Is that so?" Bo Qiong raised his hand to fiddle with his earrings and laughed at himself again, "I am not qualified to be a complaining woman, so I turned a blind eye to his affairs outside."
In fact, when it comes to the relationship between husband and wife, Nan Yi understands Xu Shiheng very well. His wife wears the earrings given by her ex-boyfriend every day, and the words "I can't forget the old love" are engraved on her face. No one can stand it. After a long time, Xu Shiheng naturally stopped pretending, gave up, returned to his true nature, and continued to live a life of debauchery outside.
Nan Yi didn't want to say much about other people's family affairs. If Boqiong hadn't crossed the line first, he wouldn't have mentioned it at all.
He also guessed Boqiong's mentality at this moment - maybe I don't like you, and I was forced to marry you, but you have to play the role of a husband to me well. Not only can you not live a life of debauchery, but I will also clean up your previous lovers.
If he didn't make such a guess, Nan Yi would not be able to connect the Boqiong in front of him with the Boqiong who set up a trap against Liu Jiajia on the cruise ship.
"Sorry, I shouldn't have mentioned you. Let's talk about something else. Does the Top 100 Group have any cruise and hotel businesses?"
Hearing Nan Yi turn the topic to business, Bo Qiong's shrewdness instantly gathered from all his limbs to his heart, and his face straightened and said, "Yes."
"I have a project that is very suitable for your group to participate in. I will be busy with other things next month. Let's make an appointment someday in July and I will explain the project to you."
“Is the project big ?”
"It's not small. It started operating a few years ago. If we can cooperate successfully, the Top 100 Group will not only get the project income, but it will also help your family's main business. So, I have to give you a heads-up. My conditions will be more demanding. For you, the investment is large, but the profit share can only account for a small part."
"Really? You make me more interested now." Boqiong said with interest.
