And one of the things I've been thinking about this

And one of the things I've been thinking about this year was the anti-consensus. When you have a consensus on a market, when you have that confidence, you have the opposite trend. When you have a consensus, the market goes the other way... I'm just saying it in Konglish called anti-consensus.

Concerns about a recession dominated at the beginning of the year. In the second and third quarters of last year, U.S. GDP growth was actually negative for two consecutive quarters, entering a technical recession, and the Russia-U.S. war did not seem likely to bring prices down either, so high interest rates, high prices, and strong dollars continued to bolster the prospect of a set future. But after this one consensus was formed, the opposite trend emerged. As expectations of a pivot picked up, interest rates fell sharply, the dollar weakened, and the stock market began to strengthen dramatically.

And it was during the SVB bankruptcy in March of this year that the consensus really became a fait accompli. The bank's bankruptcy has shrunk the bank's lending supply... so if even the central bank tightens, it will have to double-tighten. The key is that the first bank bankruptcy is tantamount to a wedge into a recession, and in response, the Fed will stop raising interest rates. The Fed's rate hikes will continue until March at the most... then freeze, and then start cutting interest rates in September or the fourth quarter of this year. It's widely believed that interest rates will come down to the low 3% range by 200 basis points by next year. And the 10-year U.S. Treasury bond rate has fallen to 3.3%. A further drop in interest rates.. And the Fed's rate cuts by the end of the year are a sense of power. But that sense didn't last long.

The tipping point seems to have been June of this year. The U.S. Treasury Department's supply of government bonds began to increase at the end of June as negotiations on the U.S. debt ceiling ended. And international oil prices, which turned upward in May this year, have been steadily rising to the bottom at $65 a barrel, amid expectations of prolonged inflation. And initially, government bond rates rose in line with the unexpected strength of oil prices, but after the debt ceiling negotiations in June, they rose sharply, exceeding the 3.8% 10-year benchmark, which was one of the strong resistance lines, which I mentioned in July.

Uh-huh. Well, the combination of unexpectedly high U.S. Treasury bills in early August, credit ratings downgrade, growth prospects for the FOMC fueled by strong growth in the third quarter, and strong employment indicators has led to a sharp rise in government bond yields, which are expected to continue to fall. And international oil prices have also risen to $95 a barrel in early October, bolstering the argument that it's only a matter of time before they exceed $100. Yes. One sense is created.

But that sense of conviction didn't last long. And in November, the Great Reversal begins. The scheduled issuance of government bonds has shown the willingness of the U.S. Treasury to stabilize the market by focusing on the short-term rather than the burdensome long-term, and the FOMC has preached caution to the market about further interest rate hikes by mentioning dotted lines and other factors. The subsequent announcement of a sharp slowdown in employment in October led to calls for growth, and the CPI in October was almost a wedge into the market. And the market is also paying attention to the PCE, which will be released this week. And the rate is now below 4.4%. It's the moment when confidence in further increases in interest rates has been created.

And international oil prices have also fallen sharply, peaking at $95 a barrel, and are now just below $75 a barrel. Investment in raw materials, an inflation hedge asset, appears to have been hit harder by the disappearance of inflation expectations. Fundamentally, the weakening of OPEC+'s control may have had a significant impact. If oil prices go up, supply increases. If they go down, demand increases. (Is that too natural?) As oil prices rise, starting with offshore oil fields in Brazil, the will to produce shale oil that has been dormant is strengthening. Chevron and ExxonMobil in the U.S. are buying new shale oil companies, showing their willingness to increase oil production. And before it goes down, at a little bit higher oil prices... And the desire to sell oil that they had not been able to sell can also be an unaffordable material for OPEC+. The oil price, too, seems to have been beaten as soon as the new oil price of $100 was built.

Interest rates and oil prices are not the only factors that cause this phenomenon. The same goes for the exchange rate. The exchange rate, which was pushed back to 1,215 won at the beginning of the year, rebounded to 1,360 won, hitting 1,360 won, and then collapsed and rebounded. And last October, it exceeded 1,300 won, keeping pace with the H4L, raising concerns about a long-term high exchange rate. However, the Fed's pivot since November has pushed down to the 1,280 won level, showing rapid changes since the confidence was created.

Anti-consensus… What's the reason for this? Maybe it's a swing. There's a lot of liquidity that's responding to the news. If there's news in one direction, there's a lot of funding in that direction. And since that kind of flow is much stronger than in the past, there's a lot of fear that I'm the only one who's going to miss this opportunity. So, wouldn't that lead to more concentration? Wouldn't it lead to a faster concentration? If that kind of concentration was made into a concentration, there would have been some strong price formation... and I think there was a faster profit-taking than anyone else.

It seems like this is a very strong period of inclination. And when that inclination continues ... seeing the price increase, logic is created, consensus is formed based on that logic. We need to be careful about this inclination and consensus. Let's take a closer look at whether there's an extreme inclination to either side. Not only at the end of the year, but also next year, the anti-consensus. It's going to be a word to watch out for. Thank you.