The fundamentals of many companies in the U.S. stock market account for 1 3, and the repurchase (in fact, borrowing money) accounts for 2 3. Since 2000, the S&P 500 repo index has risen by 800% and the S&P 500 by 200%, while the debt ratio has risen significantly. For example, Apple's profit increased by 38 times (2010-2011 two-year average, to 2023), while the stock price has risen by 136 times.
Reasons for China's bailout:
Ordinary people have money in their hands, saving 137 trillion at the end of 23, an increase of 16 over last year7 trillion, and loans increased by 3 trillion less. Before the epidemic, the savings in 2019 were only 81 trillion. Compared with the pre-pandemic period, household savings increased by 70%, much higher than the growth of M2 (39%), and higher than the growth of household loans (42%).
The current background is a real estate adjustment that occurs once in more than 20 years, and it is a large-cycle adjustment.
The people are about 25 trillion. Now it is mainly due to the lack of confidence in ** and the mutual feedback caused by liquidation. **Claiming to save the market, in fact, hundreds of billions can be done. If it rises by 30%, the wealth of the people will increase by 8 trillion, which is appropriate.
The P/E ratio of 12 times is low enough, and the lows of the United States and Japan are 15-18 times, and now it is 21-25 times. The average dividend yield of A shares is 23%, which is significantly higher than the 16%。The repurchase of U.S. stocks is much higher than that of A-shares, and the repurchase itself basically does not increase the cash return of investors, and is essentially borrowing money.
The housing market and ** want to save one, not both. The housing market has risen for more than 20 years and fallen for 17 years (since October 2007).
The purpose of the bailout is to smooth the connection between the past housing market and the future, which is an emergency rather than a rescue. If you buy fewer houses in the future, you can save trillions every year and become a stable fund.
Figure 1: The S&P 500 Repo Index outperformed the S&P 500 by three times.
Figure 2: Stock Price is 135-4.8 times.
Figure 3: Buybacks Cause Debt Ratios to Rise.
Figure 4: Share Price Increases Compare to Profit Growth by 2-7 Times.
The above information**: Wande Xingshi Founder Bloomberg.