Thread by @Trinhnomics

News flow says Asian equities up on "extension" 🤗of China deleveraging (remember 9% of GDP TSF injection in Q1 so good bye "deleveraging") & then SHCOMP spectacularly went down 📉on investors feeling too EXTENDED. News furiously coming up w/ reasons sudden📉, hint sellers>buyers

Can't spend ur life trying to understand why markets go up or down every day - key is to understand fundamentals & enjoy the "ride", whether 📈 or 📉. Keynes: Markets can remain irrational for longer than you can remain solvent😎

Bottom line: Make $$$$ & have fun no matter wut🤗

So apparently people are "worried" that the liquidity injection in Q1 2019 (again, roughly 9% of GDP injected) will be scaled back as, well, it was massive. And so equity buyers had some deleveraging extension fatigue today...Goes to show, investors/markets fickle 🤗

PBOC: Won't flood 🌊🌊🌊the economy w/ liquidity 💪🏻

Wut does this mean? TSF likely less in the quarters ahead 🤔, as in CPI at 2.3% YoY is gonna limit the PBOC or maybe they think CPI will rise 📈🤔.

Remember that China total social financing was 9% of GDP in Q1 2019 alone 🤑

China March home prices rose 0.61% mom versus 0.53% mom, meaning the 9% of GDP TSF injection into the economy found its way to equities & real estate...

Difficult to be the PBOC:
a) Bearish 🐻growth = bond bubble (rate ✂bets)
b) But equities languish & pump liquidity (9% of GDP in Q1 '19) but then BULLISH = 📈CPI & growth so bullish equities+real estate but bearish🐻bonds (👇🏻👇🏻👇🏻)
c) But "prudent" vibe =🐻equities🤷🏻‍♀️

Wut to do🇨🇳

Very difficult job b/c there's too much liquidity onshore & so there is always a bubble somewhere (pick an asset: bond, equities, real estate). Meaning, it depends on wut the policy is then liquidity squish around there.

👇🏻Equities 📉on fear that the PBOC wants to help bonds.