Luboma: Current risks associated with United States debt are not systemic crises, but short-term disturbances at the liquidity and confidence levels

The Joint Investment Director of the Luboma Fund and Managing Director of the Public Equity Investment Department II An Zhu stated that, from the information available, the current risk associated with United States debt was not a systemic crisis but a short-term disturbance at the liquidity and confidence levels. As to why the market reacted strongly to the liquidity problem, it was felt that the concern was more rooted in “obfuscation + shock”. “The liquidity problem is complex, difficult to see, and can be misinterpreted as a systemic financial crisis if short-term shocks are severe; but historical cases — British pensions, Silicon Valley Bank, etc. — show that liquidity shocks can be quick interventions by central banks, which are intrinsically different from debt crises that require high leverage, and that each shock may be a bottom-up opportunity.” At the same time, supply pressures should not be over-expanded. According to Angil, the size of corporate debt issues in the United States declined significantly in July compared to June and was not a market concern for “spill of supplies”; the three-quarter pressure on United States debt issues was partially released in July, and subsequent supply pressures are expected to be marginalized。