Some people say that the stock market has entered the bull-bear watershed, and some people say that it is now possible to bargain. Is the bear market over or just entering the bear market?

The stock market is in a deep bear market.

Economist Han Zhiguo.

Since 2008, China stock market has been running in the big bear market. Although the 4 trillion bailout triggered a strong rebound in the stock market, it was this 4 trillion bailout that became the waterloo of China's economy and ruined the once-in-a-lifetime structural adjustment opportunity of China's economy, thus ruining the long-term development prospect of China's economy and the long-term hope of China's stock market. Since the end of last year, almost all institutions have judged that a new bull market in China stock market has arrived, and even quite a few institutions think that a bull market in China stock market has begun. However, as a result of market operation, these institutions and even the whole market have suffered numerous losses, and the higher they look, the greater the losses. Since the end of last year, I have been warning the market that there can be no bull market in China stock market, and the market is still running in a long-term bear market. This year's market will fluctuate, and the center of gravity will move down. Even many times, it has warned that the GEM and the small and medium-sized board will face extinction. However, a considerable number of investors still fantasize about the upcoming bull market and rising stock market, and the result will inevitably be black and blue and heavy losses.

The big bear market in China stock market has been running for three and a half years, and the valuation level of large-cap blue-chip stocks is already very low. Under this circumstance, will the market usher in an inflection point and usher in the big bull market that the market expects? I don't think so. Compared with last year, the fundamentals of China's economy and the policies of China's stock market have deteriorated. There will be a rebound, but it will not reverse. Without deeper adjustment and overall improvement of macroeconomic fundamentals, it is impossible for China stock market to get out of the bear market and enter the bull market.

1, China society is brewing an unprecedented major crisis. China's economic reform basically fell by the wayside, and political reform even became a big forbidden area. At present, China's economy is in the most dangerous period in more than 30 years of reform. The gap between the rich and the poor has widened sharply, and the development speed ranks first in the world; 2% families occupy 4 1.4% of the wealth of the whole society; The flood of liquidity is hard to contain, and M2 has increased by 49.6 times in the past 20 years. Land finance and real estate bubble are devouring the wealth of the whole society, and the achievements made by residents in the past 30 years of reform are losing; Powerful people have hijacked power, and the nature of the capital market has completely changed, and it is becoming a legal tool for powerful capital to plunder social wealth. It can be said that today's China society is full of chaos, social contradictions are getting worse and worse, and social crises are accumulating. The serious lag and distortion of reform is brewing a major crisis in China society. Without crisis reform, it is difficult for China's social economy to get out of the predicament, and it is also difficult for the stock market to get out of the crisis and usher in the dawn.

2. China's economy has an obvious stagflation trend. High inflation is the main threat to China's economy. This round of inflation is the inevitable result of long-term flooding of liquidity, and it is the first cost-driven inflation in China's history. This kind of cost-driven inflation is mainly transmitted through two mechanisms: first, the high housing prices caused by the flood of liquidity lead to a sharp increase in the cost of living in cities, and the price comparison effect between cities and rural areas leads to a comprehensive cost-driven price increase in urban and rural industrial and agricultural products. There is no shortage of all commodities, but all commodities have gone up in price, which is a special type of inflation with oversupply. Second, the sharp rise in national management costs has led to the continuous advancement of the whole society. Japan's fiscal expenditure per million dollars of GDP is 1.38, while China's is 39; In recent years, the national fiscal revenue has increased by 20-30% every year, but the total national debt has increased year after year. If we count 14 trillion local financing platform, the debt ratio of our country is close to 60%. Major decision-making mistakes, blind duplication of construction and excessive extravagance and waste devour the wealth of the whole society, leading to rising economic costs of the whole society. Faced with the growing inflation, the government can only take the way of tightening monetary policy to deal with it, but the result of tightening monetary policy is bound to be that private enterprises and small and medium-sized enterprises are seriously hurt and economic growth is obviously declining. On the one hand, prices are high, on the other hand, growth is weak, and China's economy shows an obvious stagflation trend. Neither fiscal policy nor monetary policy can be effective in dealing with cost-driven inflation; Macroeconomic policies will be even more at a loss when dealing with the increasingly obvious stagflation situation. China's economic fundamentals are so poor that it is not only self-deception, but also a waste of social wealth and its own wealth to expect a bull market in the stock market.

3. There is a general tightening trend in macro-policies. On February 8th last year, at 65438, I made a prediction in Weibo. By the end of 20 1 1, the deposit reserve ratio will be raised 10 times, the interest rate will be raised more than 4 times, and the inflation rate will not be lower than 5%. The era of high economic growth of more than double digits has officially ended. Today, the deposit reserve ratio has been raised six times, the interest rate has been raised three times, the inflation rate has exceeded 5%, and the economy has shown a clear downward trend. Although we still insist on prudent monetary policy and moderately loose fiscal policy in words, in fact, monetary policy has been excessively tightened, and the loose fiscal policy has been difficult to maintain. It is predicted that inflation will be high and then low this year, and monetary policy will continue to be relaxed. Therefore, the bear market in China stock market will soon end, and a new bull market is not far off. My view is completely different from this. In my opinion, the objective factors leading to this round of inflation have not decreased, and it is too early to predict the peak of inflation. This year's inflation situation has far exceeded that of 2007. If it weren't for digital fraud, the actual inflation rate would have exceeded 10%. Even if the statistics bureau continues to falsify, there is no sign of a decline in inflation. This round of real inflation will definitely exceed the level of 2007, and it will be difficult to pass in 2-3 years. CLSA believes that the process of raising interest rates has ended, and the Shanghai stock market will reach 3,800 points in the second half of this year. I don't know what the basis of this judgment is. At the end of last year, most institutions judged that the stock market would rise by about 4,000 points this year, but as a result, most investors lost more than 30%. In April, insurance funds bottomed out, but the floating loss was more than 50 billion. No matter from the historical or realistic point of view, the grasp of China stock market by international investment banks has never been credible. From a macro point of view, the only reason for the rise of China stock market may be stability, which is the policy support made by managers to create false prosperity. The fundamentals of economy and policy don't support the rise of stock market at all, let alone the bull market. In less than three years, macro-policies have undergone five major directional adjustments, which is a big joke in the history of international economic development. The premise of bull market formation is the clarity and stability of expectations. In the chaotic macroeconomic policy environment, it is wishful thinking to expect the market to get out of the bull market or even the big bull market.

4. The scale of non-cash impulse is unprecedented. The imposition of 20% income tax on non-cash and the adjustment of personal income tax law have sent a strong cash signal to non-cash, and the current pressure on non-cash even exceeds the big bear market in 2008. Due to the increasing polarization of society, the stock market is becoming an important place to widen the gap between the rich and the poor, and it is increasingly causing strong dissatisfaction in the whole society. It has become an objective necessity to change the existing policy. No matter how the policy is adjusted, the policy orientation will be more and more unfavorable to the non-size, prompting the non-size to have a strong cash impulse, thus causing increasing financial pressure on the market. Coupled with the expansion of the market, the imbalance between supply and demand is difficult to change in the short term.

5. The international board and the New Third Board will have a strong impact on the existing market structure. The establishment of the international board market will have a strong impact on the main board market, and the existing investment ideas, investment methods and investment models will undergo major changes, which will also promote the development of the main board market to a higher level. The influence of the New Third Board on the Growth Enterprise Market and the small and medium-sized board market is more obvious. Although most of the stocks in GEM and SME market have been halved, with the launch of the New Third Board market, many high-valued stocks will continue to suffer heavy losses, and there is huge room for stock price decline. I have been warning these two aspects since this year, but it has not attracted the serious attention of the market and investors. Growth Enterprise Market (GEM) and Small and Medium-sized Board (SME) have been hijacked by powerful capital, and the changes in the service objects of these two markets mark the complete failure of China stock market. In addition to the cycle of "circling money" and "circling money again", the positive function of the stock market can be said to have been lost. Where will the foundation of the bull market come from in such an extremely distorted institutional environment?

6. The shadow of the disintegration of the euro zone still hangs over the world economy. Since the beginning of this year, the sovereign debt crisis in the euro zone has intensified. In addition to Greece, Portugal and Spain, Italy also has a sovereign debt crisis, and according to my on-the-spot investigation, France is also very likely to have a sovereign debt crisis. It can be said that the current euro zone is mainly supported exclusively by Germany. Once Germany can't support it, the euro zone may disintegrate. If the euro zone breaks up, it will not only lead to a major economic crisis, but also pose a major threat to China's huge euro foreign exchange reserves and even cause huge foreign exchange losses.

Generally speaking, at this stage, the China stock market is beset by internal troubles and external troubles, and the pressure is greater than the motivation, and the downward trend may be greater than the upward trend. From a deeper perspective, China's economy is facing five deadly deep-seated dangers: 1, and internal contradictions have broken out. Instead of trying to solve them, it is better to try to cover them up. The fuse that caused the economic difficulties has been found. We should not cut this fuse, but extend it. Replacing popular support project with face project not only paralyzes society, but also anesthetizes oneself. 4. Solve contradictions by intensifying contradictions, such as liquidity release. 5. Replace everything with GDP growth, and one handsome guy covers a hundred ugly ones. China, which is lagging behind in reform, is waiting for a crisis, a major economic and social crisis. If economic and political reforms cannot be comprehensively promoted as soon as possible, contradictions will accumulate day by day and crises will come uninvited. The systemic risk of China's economy is accelerating, which is an objective reality that we don't want to see but must face up to!