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YouTube2Text → Transcripts → R2理財兩天跌掉半月收益12家理財子集體寫信！1.55億人當存款買的是信用債！化債壓存款利率到0.95%逼你替銀行接盤！華發暴雷千億兜底散戶自己扛！安撫信是帶貨信！準存款幻覺破滅！

R2理財兩天跌掉半月收益12家理財子集體寫信！1.55億人當存款買的是信用債！化債壓存款利率到0.95%逼你替銀行接盤！華發暴雷千億兜底散戶自己扛！安撫信是帶貨信！準存款幻覺破滅！ — Transcript

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0:00Official narratives are as such; I
0:01refuse to accept them blindly. A couple
0:02of days ago, I saw something quite
0:04interesting. Gong Wealth Management
0:05published an article titled "To
0:07Investors: Stay Calm Amidst the
0:08Volatility." By October 5th, the
0:10Agricultural Bank of China's wealth
0:12management subsidiary followed suit, as
0:13did Everbright Wealth and CITIC Wealth.
0:15Basically, it was widespread. A total of
0:1812 bank wealth management subsidiaries
0:20jumped on board, collectively writing
0:22letters to their clients. Why? Because
0:24on that Friday, October 30th, those "R2
0:26" medium-to-low risk products that banks
0:28usually sell—which the Chinese public
0:30treats as a substitute for fixed-term
0:31deposits—simply plummeted. Some people
0:33lost half a month's worth of earnings in
0:35just two days. Some had made over 1,700
0:37yuan in October, but on the very last
0:39day of the month, they ended up losing
0:41over 2,300 yuan. I call this the
0:42shattering of the "deposit replacement"
0:44illusion. What does that mean? It means
0:46ordinary people thought they were buying
0:47a deposit with a slightly higher
0:49interest rate, but what were they
0:50actually buying? It’s like a meat
0:51grinder—the final stage of turning
0:53things into mince. I'll explain why it's
0:55"mince" in a moment. And what is the
0:57root cause? It’s that fiscal policy
0:58forces this nonsense; deposit interest
1:00rates are pressed to the floor, and the
1:01result is that the Chinese public has to
1:03pay the bill for this administrative
1:04pricing every day. Before we dive into
1:06today's topic, let's clarify what "R2"
1:08actually is. Bank wealth management
1:10products in China are categorized by
1:11risk into five levels. R1 is the lowest
1:13risk, and R5 is the highest; the higher
1:16the number, the greater the risk. R2
1:18corresponds to medium-to-low risk, which
1:19is the level most people can buy through
1:21their bank apps. As of the end of
1:23September this year, the scale of bank
1:25wealth management in China reached 35.37
1:27trillion yuan. About 95%of the wealth
1:29management funds are parked in R1 and R2
1:31tiers. What does this tell us? Wealth
1:33management is not an investment market
1:35at all; it's a pool treated as a savings
1:37account by over 150 million people, but
1:39while they see it as a deposit, it isn't
1:41one. Moreover, the starting point of
1:42this event wasn't October 30th, but
1:44September. What was the fuse, actually?
1:46It was the China Fortune Land
1:47Development (CFLD) default—told you so.
1:49We’ve already discussed the China
1:50Fortune situation, so I’ll just skim
1:51over it. Huafa’s debt is over 500
1:53billion, with 160 billion due within a
1:55year, but they only have about 50
1:57billion in usable cash. They started
1:58panicking in September and tried to
2:00negotiate extensions with banks, but all
2:01three banks rejected them. On October
2:0326th, two trust funds officially
2:04defaulted, which we’ve already discussed
2:06before. Today I want to focus on how
2:08Zhuhai plans to save them. Just last
2:09week, on October 4th, what did the
2:11director of the Zhuhai State-owned
2:12Assets Supervision and Administration
2:13Commission say? He said over 40 billion
2:15in support funds has already been
2:16deployed, and another 70 billion is
2:18being coordinated, totaling over 110
2:19billion. I don’t know if this guy owns a
2:21hen that lays golden eggs, or if the
2:23entity itself can somehow lay them.
2:25Zhuhai’s total fiscal revenue for all of
2:27last year was only 94 billion. That
2:28means Huafa is consuming over two years
2:30of the city's revenue. What does that
2:31tell you? It means the pressure is no
2:33longer just on Zhuhai; even if you sold
2:35off the entire city, it wouldn't fetch
2:37100 billion. So where is the money
2:39coming from? Isn't this something we
2:41should all be thinking about? The money
2:42is either coming from Guangdong Province
2:44or from the central government. Or it's
2:45the old game of borrowing new debt to
2:47pay off the old, a cycle of debt that
2:48eventually forces the central bank to
2:50print more money. Huafa's ailment isn't
2:51unique. It isn't just Huafa's problem
2:53alone; what is the fundamental issue
2:55with Huafa? It has one foot in
2:56infrastructure financing and the other
2:57in the real estate market. Local
2:59state-owned enterprises across the
3:00country are basically the same; Huafa
3:02just blew up first, but the underlying
3:04issue is structural.
3:06Then on October 30th, the last trading
3:08day of the month, the interbank market
3:10was already tight, bond yields hit
3:12historic lows, and the Shanghai
3:14Composite Index suffered a plunge within
3:16a week.
3:18With these events colliding, Huafa’s
3:20incident triggered a market-wide
3:21stampede. The sequence of this stampede
3:23is definitely worth looking into—what
3:25happened first? First, financial
3:26companies made preemptive redemptions of
3:28the bond funds they held. When a bond
3:30fund is redeemed, it has to pay out cash
3:32, so the bond fund is forced to sell
3:33whatever is easiest to liquidate. In the
3:35current Chinese financial market, what
3:37has the highest liquidity? Government
3:38bonds and the "dual-perpetual" bonds of
3:39major banks. These are what the central
3:41bank is currently endorsing. What are
3:42these "dual-perpetual" bonds? They refer
3:43to the tier-2 capital bonds and
3:44perpetual bonds issued by banks. To put
3:46it plainly, these are debts issued by
3:47banks to replenish their capital.
3:49Whoever buys these is essentially
3:50padding the banks 'capital. The decline
3:52in various assets that day clearly laid
3:53out the order of this impact. The 10-
3:55year treasury yield rose by 2.7 basis
3:57points, 3-year AA + medium-term notes
3:58rose by 5.2 basis points, 3-year tier-2
4:00capital bonds rose by 7.5 basis points,
4:02and weak-credit long-term urban
4:04investment bonds rose by a full 15 basis
4:06points. So, what does this set of
4:07numbers mean? It means that
4:09interest-rate bonds were merely treated
4:10as a temporary ATM and sold off casually
4:12, while what was truly being repriced
4:14was credit. And the worse the credit,
4:16the harder it fell. But the most
4:17unexpected thing was yet to come. This
4:19sell-off only lasted three trading days
4:21, because if this situation in the bond
4:23market had continued for just another
4:24half-month or a month, the entire
4:26Chinese financial system would have been
4:28completely shattered. Then, the Chinese
4:30central bank urgently released liquidity
4:32. By November 4th, 10-year treasury
4:34yields began to fall again, and along
4:36the way, they even hit a new historical
4:38low. What does this indicate? It
4:39indicates that from a market perspective
4:41, credit should have been repriced, but
4:43as soon as this repricing started, the
4:45CCP used administrative power to
4:47forcefully suppress it. How did they
4:49suppress it? The central bank conducted
4:501 trillion yuan in reverse repos for
4:52four consecutive days, plus the hundreds
4:54of billions of rescue funds for Zhuhai
4:56Huafa. This wasn't filled by the market
4:58; it was forcibly suppressed. So, the
4:59question arises: A pit that was filled
5:01in just three days, why did it cause
5:02over 150 million people to be left in
5:04such a state? The answer lies in the
5:05underlying assets of R2-level wealth
5:06management products. Let’s take a look
5:07at what kind of stuff is actually in the
5:09assets of these R2 wealth management
5:10products. Within R2 products, there are
5:1114 trillion yuan in credit bonds and
5:12only 0.93 trillion yuan in interest-rate
5:14bonds. What kind of concept is this? You
5:15think you're buying a government bond
5:17fund, but you're actually buying a
5:19credit bond fund. And what's inside
5:20these credit bond funds? They're packed
5:23with local government debt, bank
5:24subordinated bonds, and all sorts of
5:26corporate debt. Government bonds barely
5:28make up a fraction of it. Plus, nearly 3
5:30trillion comes from bank wealth
5:31management products, and your money ends
5:33up in public funds, mostly bond funds.
5:35In the first few months of this year
5:37alone, this amount surged by 1.14
5:38trillion. Why do they do this? Because
5:40bank wealth management divisions don't
5:42dare buy long-term bonds directly. What
5:44are they afraid of? They're afraid of
5:45extending the duration of their entire
5:47asset structure. So, those guys at the
5:49banks cleverly outsourced this long-term
5:51risk to bond funds. As a result, by
5:52October 30th, the average duration of
5:54bond funds across the market soared to
5:562.97 years, hitting the extreme 99.8 th
5:57percentile level for the past two years
5:59—meaning it's essentially the longest
6:01duration seen in the last two years. To
6:03put it more bluntly, the short and
6:04stable structure that wealth management
6:06companies show you on paper is all a
6:07load of crap, because the volatility
6:09risk of long-term bonds has all been
6:10dumped onto those public funds. Now,
6:12these bond funds have been pushed to
6:14their limit, which is why they were the
6:15first to get hammered on October 30th.
6:17You might wonder, why would wealth
6:19management firms force their positions
6:20into this shape? Because both sides are
6:22pressed against the floor; let's look at
6:23the data. On the bank liability side,
6:25the listed interest rate for one-year
6:27fixed deposits at major state banks
6:28dropped from 1.45%in July 2020 to 0.95%
6:30by May last year. Demand deposits are
6:31even worse, left at just 0.05%, which is
6:33barely better than nothing. All fixed
6:35deposits under one year have fallen into
6:36the zero-range, and that is exactly how
6:38the money is being squeezed out. In the
6:40first three quarters of this year,
6:41household deposits grew by 3.34 trillion
6:43less than the same period last year. A
6:45significant portion of this money has
6:46flowed into wealth management, and
6:47another part has flowed into the stock
6:49market. On the asset side, the yields on
6:51assets available for wealth management
6:52have also worsened. In September this
6:54year, the issuance spread for 5-year AA
6:55+ rated local government financing
6:56vehicle (LGFV) bonds was only 47 basis
6:58points, an all-time low. Furthermore,
6:59the spread of perpetual bonds over
7:00ordinary medium-term notes has been
7:02compressed to zero. In other words,
7:03these idiots in the CCP have pushed bank
7:04perpetual bond yields down to the level
7:06of government bonds, while
7:07simultaneously squeezing the spreads of
7:08junk-heavy LGFV bonds to within 47 basis
7:10points of government debt. It's absurd,
7:11isn't it? Given the current
7:12creditworthiness of these LGFVs—to put
7:14it bluntly—you’d struggle to even rent a
7:16shared bike using their credit. I
7:17wouldn't even lend them a charging cable
7:18, let alone money. Yet, despite this,
7:20their yield spread compared to
7:21government bonds is less than 0.5%. With
7:23no yield spread left and no liquidity
7:24premium, all that remains is crowding.
7:26So, how else can these wealth management
7:27subsidiaries scrape together any returns
7:29? What do you think? They could buy even
7:30worse bonds to earn higher interest, but
7:32high-interest LGFV bonds are being
7:33swapped out in batches. Moreover, banks
7:35aren't keen on touching these toxic
7:36debts on the market right now, as
7:37evidenced by their inability to even
7:39handle loan rollovers for companies like
7:40Huafa. Well, what about borrowing money
7:41to add leverage and buying more
7:42long-term bonds? Capital adequacy ratios
7:44can't handle it, for one thing. Plus, if
7:45you buy long-term bonds, the bank’s
7:47duration mismatch will only grow longer
7:48. So, only one path remains: since they
7:50don't dare buy these bonds directly,
7:51they hand the money over to bond funds,
7:52letting the funds buy the long-term
7:53bonds for them and parking the duration
7:54risk on the funds' books. That is the
7:55origin of this "duration-chasing"
7:57behavior. Alright, having said that, you
7:58might ask: it’s not the first time the
8:00bond market has fallen; there were
8:01adjustments in 2024 and last year, so
8:02why did wealth management products
8:03remain steady before, but are falling
8:05like this now? Because, in the past,
8:06wealth management subsidiaries had a
8:07whole set of "filters" in place, but now
8:09, that filter system is completely
8:10broken. After the market crash in
8:12October 2022, the wealth management
8:13industry invented a few new tricks. Let
8:15me explain them to you; these tactics
8:16are quite interesting. The first one is
8:18called "smoothing trusts." What does
8:19that mean? To put it simply, wealth
8:20management products acquire these bonds
8:22through trust plans, but what is the
8:23function of the trust? It's a man-made
8:25benchmark, say 2%. Whenever the actual
8:27return exceeds 2%, the excess is
8:29withheld in the trust. Why withhold it?
8:31It's to save it for a day when returns
8:32fall below 2%, so it can be used to top
8:34it up. In this way, the yield curve is
8:35smoothed out. This is an artificial
8:37smoothing, mind you. Another method is
8:39called "closing price valuation." On the
8:40Shanghai Stock Exchange, there’s a batch
8:42of private placement bonds that nobody
8:44touches; there’s no trading and no real
8:45market price. Since the closing price is
8:47always stuck at 100, the wealth
8:48management subsidiary calculates the net
8:50value based on that 100. But where has
8:51the bond really fallen to? They don't
8:53care at all. It's basically accounting
8:55at cost, adding interest daily. That’s
8:56how it "steadily rises," because you
8:58can't see any price fluctuation process
9:00at all. There’s also something called
9:01the "self-built valuation model," and
9:02this path is even more wild. The wealth
9:04management subsidiary just ignores the
9:05ChinaBond valuation. How do they do it?
9:07They price the bonds themselves and
9:08calculate their own numbers. It’s
9:10incredibly crude—they just take the
9:11average transaction price from the past
9:13six months as today’s price. This means
9:14if a bond crashes today, you won't see a
9:16single word of it in the net value. And
9:18what is the ChinaBond valuation? It’s
9:19the reference price set daily for each
9:21bond by the China Central Depository&
9:22Clearing Co. But the wealth management
9:24subsidiaries don't even bother with the
9:25reference price provided by the
9:26authorities. What was the requirement?
9:28Wealth management firms are supposed to
9:30calculate net value according to that
9:31price, but they simply refuse to do so,
9:33all to keep that smoothed-out curve for
9:34everyone to see. Then, in December 2024
9:36, even the CCP’s own regulatory
9:37departments didn't know the true scale
9:39of the entire wealth management market.
9:41Regulators started issuing notices to
9:43these firms, banning all these practices
9:44: closing price valuation, smoothed
9:46valuation, and self-built models. This
9:47isn't because regulators want to control
9:49the risk; it's because they are
9:50completely baffled themselves. They have
9:52no idea how many holes are hidden under
9:53that 30 trillion in wealth management
9:55assets. The CCP can't even see clearly
9:56anymore, so they have to rip off the
9:58filter to let the real prices show, just
9:59so they can at least have a number on
10:01how big the bomb is. And what do you see
10:02then? Wealth management subsidiaries
10:04collectively wrote their first letter
10:05this March, followed by another in July
10:07, another in August, and yet another
10:08this month—four letters in one year.
10:10What does this signify? It’s not that
10:12the underlying assets have become more
10:13dangerous; the damn risk has always been
10:14there. So, what has changed? It’s the
10:16several layers of filters that once
10:17obscured the assets from retail
10:18investors; they are now gone. From here
10:20on out, every basis point of credit
10:21spread hits the faces of those without
10:23pricing power in the form of daily
10:24market-to-market fluctuations for the
10:26first time—in other words, everyone can
10:28see the volatility. Now that we've
10:29reached this point, we need to settle
10:31the biggest account: how exactly does
10:32this machine operate? Who is treating?
10:34And who is picking up the tab? The entry
10:35point of this machine is this ridiculous
10:37fiscal debt resolution. In 2024, didn't
10:38the CCP engage in a 6 trillion yuan
10:40debt-swap entertainment event? What on
10:42earth is this "debt swap"? It's nothing
10:44sophisticated; to put it bluntly, it's
10:45just using the Ministry of Finance's
10:46credit to swap for local government debt
10:48to lower the costs a little bit. So, who
10:50is the ultimate buyer? The banks, of
10:52course. And what money do the banks use
10:53to buy it? They use deposits. So, let’s
10:55look at this ledger: if banks buy 1.6%
10:57government bonds and 1.97%interest-rate
10:59swap bonds, and deposit rates don't fall
11:01, what happens to their margins? They
11:03would completely disappear. In the
11:04second quarter of this year, the net
11:06interest margin of Chinese commercial
11:07banks was only about 1.3%. At this point
11:08, whether to push deposit costs down
11:10further is no longer a multiple-choice
11:11question. It has to be done, so deposit
11:13costs must be pushed below 1%. That 0.95
11:15%figure came about exactly this way, so
11:18what has this turned into? It means that
11:20bank interest margins and local
11:21government debt relief are not two
11:22separate things; they are just two sides
11:24of the same coin. Once the interest rate
11:26is hammered to the floor, risk-averse
11:27ordinary people have to move their money
11:29from time deposits into wealth
11:30management products. Once these products
11:31get the money, what do they buy? They
11:33buy everything that the banks themselves
11:34don't want on their own balance sheets.
11:36Why don't the banks want to hold them?
11:37Because if these items were on the banks
11:39'books, they would have to be
11:40marked-to-market daily, and if values
11:41drop, they would have to be disclosed.
11:43But once sold to wealth management,
11:44these accounts don't have to be exposed
11:46, and the bank can dictate the valuation
11:47itself. What kind of stuff are they
11:48buying, anyway? The corporate bonds and
11:50bank "Tier 2 capital bonds" I mentioned
11:51earlier are exactly these kinds of
11:52things. In Tier 2 capital bonds alone,
11:54wealth management products bought 386.5
11:55billion yuan from the market last year,
11:56not to mention interbank certificates
11:57and nearly 3 trillion yuan in bond funds
11:59. So, you see, the public's money moved
12:00from deposits to wealth management
12:02products without ever leaving the
12:03banking system. It just shifted from the
12:05deposit column on the bank's books to
12:07the list of holders of bank capital
12:09instruments and credit assets, and it's
12:10marked to market daily. At the same time
12:12, this practice has severely distorted
12:14China's interest rate levels. Risk
12:16premiums are completely suppressed,
12:18spreads are at historical lows, and
12:20durations are at historical highs,
12:22creating an extremely fragile system.
12:24Just a single trust default of over a
12:26billion yuan was enough to send all bond
12:28ETFs plummeting across the market in
12:29four days, letting 150 million people
12:31watch their accounts drop in real-time.
12:33Then came the most dramatic part: the
12:34government bailing out the defaulting
12:36party while individual investors were
12:37left to bear the losses, both happening
12:39in the same week. Then the Zhuhai
12:40government announced a rescue package of
12:42over 100 billion yuan. From the moment
12:43the trust default was exposed to the
12:45Zhuhai state-owned enterprise stepping
12:46in to pledge 70 billion, then 110
12:47billion, it all happened within nine
12:49days. On October 26 th—the same day the
12:51Huafa news broke—the People's Bank of
12:53China set up a new tool called the "
12:55Bond Market Non-Bank Large-Scale
12:56Redemption Swap Facility." Simply put,
12:58it allows wealth management and fund
13:00companies to use central bank notes to
13:02get cash, effectively buying back the
13:04bonds they were forced to sell. Whose
13:06money is it? It’s the central bank’s
13:08money. That’s why we saw 1 trillion yuan
13:10in overnight repos injected daily for
13:12four consecutive days from October 27th
13:13to the 30th. Then, 50 million investors
13:15received their fourth notice of the year
13:17. Will this turn into a massive
13:18redemption wave like in November 2022?
13:20You have to realize that the negative
13:22feedback loop of wealth management is a
13:23spiral. Let me briefly explain the
13:25mechanism: first, a credit shock
13:26immediately forces institutions to cut
13:28their positions, and what does
13:29institutional selling mean? It’s an act
13:31of selling off bonds, and once these
13:32bonds are sold, it immediately depresses
13:34their net asset value. This value is
13:35reported to retail investors through
13:37weekly updates, and what do they do then
13:39? They start redeeming their wealth
13:40management products, which forces the
13:42direct sell-off of these credit bonds,
13:44causing spreads to widen. Once the
13:45breaking point is crossed, redemptions
13:47become self-reinforcing. How much
13:48volatility did this spiral cause in
13:50November 2022? First, the ten-year
13:52Treasury yield rose 22 basis points in
13:53four weeks. The breakage rate for wealth
13:55management products hit 21%by late
13:56December, and the entire sector shrank
13:58by over 2 trillion in the first quarter
13:59alone. The central bank didn't start
14:01cutting rates until October 25th, more
14:02than two weeks after the panic began.
14:04But this year, it only reached the point
14:05where retail investors could see the
14:07losses; the ten-year bond yield only
14:08rose 2.7 basis points before the central
14:10bank injected a trillion in overnight
14:11reverse repos for four consecutive days
14:13. This is why the People's Bank of China
14:15abandoned the seven-day rate in favor of
14:16the overnight rate—because the current
14:18fragile financial system simply can't
14:20handle the seven-day period. Why didn't
14:22it collapse this time? There are a few
14:23reasons, and none of them are due to the
14:25credit of the wealth management
14:26subsidiaries. What is the current
14:27situation exactly? It's that the entire
14:30financial firewall is gone; or, if you
14:32compare the financial system to a house
14:34, the CCP’s system has fires burning
14:36everywhere. After the central bank
14:37swapped the seven-day rate anchor for
14:39the overnight rate, it’s like carrying
14:40around a fire extinguisher, waiting to
14:42spray any place that looks like it’s
14:44about to blow up. Secondly, the central
14:45bank has realized that the fire has
14:47already spread to the core assets of
14:48state-owned enterprises. The Huafa
14:50deficit was plugged in nine days with 70
14:52billion from who-knows-where by Zhuhai
14:53state-owned assets. The credit event
14:55didn't escalate into a crisis, but
14:57something has changed. What is it
14:58compared to 2022? In 2022, retail
15:00investors ran first. This year, the
15:02wealth management subsidiaries ran first
15:04, and the entire duration structure is
15:05outsourced within bond funds; the
15:06duration structure is already squeezed
15:08to the limit. What is the ultimate cost
15:10of this delay? It means that when the
15:11next credit shock hits, the impact at
15:13the institutional level will be even
15:15more violent and concentrated. Whether
15:16retail investors can hold their ground
15:18depends on whether the central bank can
15:20step in every time, and whether the next
15:22deficit can also be bridged in time.
15:24Next, let's examine these few letters
15:25from wealth management subsidiaries to
15:27see how the current market turmoil is
15:29still unfolding. I’ve ranked the
15:30high-frequency buzzwords in these
15:32letters; look at the order of their
15:34usage, from high to low: short-term
15:35disturbance, emotional release, wait and
15:37see, stabilizing, coupon-based,
15:39lengthening holding periods,
15:40fundamentals unchanged, and bottom
15:41fishing. Let’s talk about the "coupon"
15:43aspect first. What is the underlying
15:45yield of an R2-rated bond product right
15:47now? 3 A-rated 3-year urban investment
15:48bonds are at 1.73%; perpetual bonds and
15:50medium-term notes are similar, with
15:52gross yields hovering around 2%. After
15:53deducting management, custody, and sales
15:55fees, you’re left with about 1.5%to 1.6
15:56%annually, which is only 0.4 basis
15:58points per day—earning you four yuan a
15:59day on 100,000 yuan. Yet, in one day, it
16:01can drop by six basis points. It would
16:03take fifteen days of interest just to
16:04fill that hole. If it pulls back by 30
16:06basis points, you’d need over two months
16:08to recover, and that’s assuming interest
16:09rates don't tick up even one basis point
16:11during that time. If we have another 1.5
16:13%pullback like in 2022, your coupon
16:15yield would take a whole year to recover
16:17, because even with 3%coupons in 2022,
16:19the market still couldn't hold up. So,
16:21what does the phrase "coupon-based"
16:22really translate to in a 2%yield world?
16:24It means: sorry, wealth management
16:26clients, it’s a case of "die you, not me
16:28," so don't blame us for dumping the
16:29bond funds. If you're lucky, you might
16:31break even in two months; if not, well,
16:33we'll see. Either way, the time cost is
16:35yours, not the bank's—that's what it
16:37means. Now, about "lengthening holding
16:39periods": this dip affected products
16:40with short 14-day lock-ups and 180-day
16:42products like the "half-year treasure."
16:43These were sold as liquid cash you can
16:45take out anytime. Using "lengthened
16:46holding periods" to justify losses now
16:48is like using the very opposite of the
16:49product's design to pacify clients. Look
16:51at the trash these shills are pushing,
16:52like these so-called "wide-base indices
16:53" thrown out by banks, or "barbell
16:55strategies," or "CTA quant" nonsense—
16:56it's just a bunch of metaphysical
16:57gibberish. I don't believe for a second
16:59that retail investors can understand
17:00what these are talking about.
17:01They've completely stopped caring and
17:02are just spouting pure,
17:03straight-up tricking retail investors
17:05into bottom-fishing these mixed-asset
17:06funds. Is this supposed to be "
17:07reassuring"? It’s clearly just pushing
17:09products! And they’re all pushing
17:10high-risk products outside the R2
17:11category—how damn malicious is that? Why
17:13? Because once the filter is removed,
17:15those first-wave stable products have
17:16already hit a dead end. Brokerages are
17:18already saying these wealth management
17:19yields can't beat a five-year fixed
17:20deposit, so wealth management companies
17:22have no choice but to keep scamming you
17:23into buying these stock-heavy products—
17:24but look at July and August of this year
17:26. That wave of net value decline proves
17:27that the only thing they have left is to
17:29herd conservative R2 clients into
17:30high-risk R3 products. They aren't
17:32solving volatility; they're just pushing
17:33you out of the quicksand and straight
17:35into the meat grinder of the stock
17:36market. So, what is the conclusion of
17:38all this? The wealth management drawdown
17:40early this month looks like a flash
17:41crash triggered by the Zhuhai
17:42development trust, which was calmed down
17:44in less than four days. But deep down,
17:46this machine, which has been running for
17:47two years, is facing its first real
17:49impact of a default under true market
17:50pressure. The goal is to push deposit
17:52rates to the floor to keep banks buying
17:53bonds; the middle game is to move
17:54private deposits into wealth management
17:56to help banks offload the bad debt they
17:57don't want to hold; the exit is for SOE
17:59defaults to be covered by local
18:00government and central bank bailouts,
18:01while the actual losses are dumped on
18:02the 150 million retail investors to foot
18:04the bill. Will retail investors take the
18:05bait this time? What is it that’s
18:07keeping the fuse from being lit? It’s
18:08just the CCP’s central bank pacing
18:10around the door with a fire extinguisher
18:11like a maniac. You’re already counting
18:13the days for this financial system, so
18:14it’s not because of any reason written
18:15in the wealth management subsidiary
18:17manuals. And people need to think: you
18:18might be able to hold the line on one
18:20Zhuhai development default, but if
18:21several blow up at once, can the CCP
18:22still hold it? That’s the real question
18:24. So, I'll say it again: you really must
18:25stay far away from these idiotic CCP
18:27wealth management products. To be blunt
18:28, the CCP doesn't even have a clue
18:29what’s inside them, otherwise, why on
18:31earth would they be treating this
18:32ticking time bomb like their own mother
18:34? Alright, that's all for today.
18:36If you enjoyed the show, please hit the
18:38notification bell.
18:41If you'd like to support me, you can
18:42join my membership for in-depth content
18:44.

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