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16th Sequential Equity Fund Outflow Takes Total To Over $50 Billion YTD; Retail Boycott Of Stocks Continues
The latest anticipated weekly outflow from equity mutual funds just hit a one month high of $2.7 billion, as reported by ICI, and with that, YTD redemptions by equity investors have hit over $50 billion. Domestic equity mutual funds have not seen a net positive retail inflow since April 28, yet despite this the market has been substantially rangebound and until last week. What is notable is that even during times of relative stock outperformance, courtesy of whoever it is that is left buying stocks, be it HFT algos, or Primary Dealers pumped with cheap Fed liquidity (and don't forget today is another "free $2 billion courtesy of POMO" day), the investing public refuses to be drawn into owning stocks. CNBC has now failed to sucker its viewers into the stock ponzi for 16 weeks in a row and rising. The clear capital rotation winner- the bond bubble, but that is the topic for another week.
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the truth shall set you free
and CNBC shall make you broke.
No problemo! A few less schlubs than expected lost their jobs, forever, so time for Wall St to put on the party hats and party like its '99!
oh oh, this market is running on nothing but fumes
And in confirmation the AAII survey fell to 21% bulls. Only a few ticks higher than at the panic lows of march 2009. Looks like a short shearing is coming soon. Baaaah
What shorts? I love how everyone assumes 'shorts' are the dumbest people around...basically Charlie Brown going after Lucys football time after time with the same result? I dont believe for a minute REAL shorts are sitting there at the low expecting plunges every day in fact I think theyre out after 1% and ready to short the next futures pump attempt, and its the FED who has NOTHIN but blowing hot air into a leaky balloon.
Of course, the REAL shorts are brilliant traders. They only sell the tops and buy the bottoms. Since I'm a hapless long, maybe you could clue me in as to where we are?
Thanks for the help :)
Well, where we are is a DOW thats at 10K that has no business being over 5K, if that can even be justified at all! I just think this notion that the FED daily has a whole flock of shorts to shear is ridiculous, I dont think REAL shorts are all that dumb!
So are the REAL shorts short now, with the market 100% overvalued or are they waiting for say 120% overvalued? Please help, I don't have very good connections.
I actually dont believe there are that many 'shorts' out there! If anyone is actually shorting large, I say theyre only shorting after a PUMP, then out after .5% drop. Who in their right mind would just be letting their sorts ride? I dont think shorts are so easily scalped on demand by the FED as so many people here assert. Its ALL the FED all they have is futures pumping.
Ahhh. So the REAL shorts (however few there may be) are daytraders looking to scalp 1/2 % after a pump.
One thing I'm not understanding, if you think the market is 100% overvalued why aren't you positionally short and large? I myself see certain equities that I think could rise 100% over the next couple of years and I am very long these. Other than the oil patch, there's actually not much here in general that I would be uncomfortable owning. I understand we differ about the current value of the stock market but I'm confused as to why you are not acting.
Im not short myself, or long right now. I wouldnt touch this BS market with a 10 foot pole! Not with these criminals running the show daily! My point is I have to laugh at everyone who assumes shorts are the biggest idiots around, and are just available daily for a good shearing whenever the FED feels like it! I think thats RIDICULOUS and the only real market moves since DOW 6,500 has been FED futures pumps!
Got it. Ur just here for the show!! Enjoy!
I dont play rigged roulette wheels with magnets in em, I dont play 3 card monty for sucker tourists out in the streets, and I dont play FED Ponzi pyramid scheme markets either. Hey if you think somethings 'going up' then go buy it, by all means! Im not placing my money within reach of these Ponzi criminals myself because no matter what you think the 'valuation' of it all is (valuation, what a joke, bid/ask bullshit) the main point of this market is to separate you from your money in the short term. Although I do have plenty of other 'investments'!
Oh we aren't done yet :) Personally, I'd be surprised if we crash in the next few months, they placed this pomo well. Hey TD, are you tracking which issues get purchased? I bet it's a lot of the early 80's and 90's issuances... :) Banks love selling negative yielding treasuries to Uncle Sam.
'I'd be surprised if theres a crash in the next few months'
That assumes the market operates in a vacuum and all is well week after week? Suspension of disbelief to infinity, bitchez
*yawn* Keep shorting while the banks keep proppin' it kid, they aren't done sucking the money from the shorts, additionally banking valuation metrics will keep inflating asset prices as the yield curve drops quicker to the ground than a stripper snatching a one dollar bill from the stage.
'Keep proppin' what, KID?? DOW 10K? LMFBO whatever! So youre 'all in long' here then? You gonna be around later after its all red because this has NO legs?? Yea I doubt it, KID!
RIGHT phaesed, 'the shorts' are always available to suck dry daily, cuz theyre real stupid and all. And of course 'shorts' are the only ones who have NO CLUE whats really going on either, they just keep their money short until theyre scalped again time after time.
Oh they really got 'the shorts' on that one Phaesed, DOW popped 20 and the shorts are shrieking like scalded apes...man you 'experts' really crack me up.
'Banking valuation matricies' LMBO!
Hey Phaesed 'kid' you still 'long' into bank valuation matricies propping? DOW-12. So much for your guaranteed ramp job and short shearing.
Hey boy! Hows that guaranteed short shearing goin? Not as well as youd planned this morning huh? Up yours, asshole.
I think you have hit on a key point. It does seem that they have placed the pomo's right around all of the REALLY BAD economic numbers.
A coincidence?
Yea they placed this POMO well, and a lot of good it did with markets solidly red minutes later. Whatever, boy.
Nice call this morning there shit fer brains! Im sure you were nice and long on your call, BOY!
Starve the beast.
boycot bitcheeees!
Makes me glad to see retail not participating in the fraud which Im SURE the Great Ben assured everyone they would be, buying the top of the prop hand over fist from the central banksters. They have real problems as right now the FED is the world record bagholder, and no ones buyin the crap. Let them play 'pump the futures', who cares!
I agree that the "great plan" all along was to drift the stock market higher through Fed manipulation until the retail public dives back in. My question is what will the Fed do with all the stock it's been accumulating if the retail public continues to (wisely) boycott the market?
Hell I dont know what the FED will do with aprox $2 trillion worth of bubble stock theyve been buying, and frankly I dont care! Sit back and watch the fukers BURN!
The US Corporation will not default on it's sovereign debts, but is taking extraordinary efforts (expropriation) to build reserves for continued debt service payment
Americans, welcome to the improved US Corporation treadmill; either pay the man or take this pill for a nice trip to the happy hunting grounds
jack boots bitchez!
As was posted last week here (courtesy of Fidelity), people are pulling money out of 401k's and their MF's just so they can pay their bills now. No reason to expect this to reverse course. Actually, as more people get laid off, it should really begin to accelerate.
Yeah it will accelerate. Many people are unaware of how much money union workers have contributed over the year not only to their 401k but annuities.
A laborer for example receives and additional $6.00 per hour simply for their annuity.
Iron workers are north of 11.00
Some of these guys have decades invested in annuities and 401ks and the job loss will be severe in that sector. These guys will be pulling out for the next 5 years with many retiring early. Maybe younger workers will pullout and head to school or start a business someplace affordable.
"CNBC has now failed to sucker its viewers into the stock ponzi for 16 weeks in a row and rising."
There are plenty of suckers that would listen to CNBC aka. The Charles Schwab Television Show but those suckers are out of money.
I agree, if the suckers HAD money, they'd be getting suckered into the market at just the bat of Erins eyes! But alas, they have no money to throw at the bubble Ponzi. Dont you guys be suckers either and throw money at the pops, sell them, theyre weak.
I am pretty much stuck in low yield investments because I don't have the guts to go into gold or silver. :(
GlassHammer, I dont have 'the guts' to buy gold and silver either! I dont trust it! These same scam artists own TONNES of the stuff, and would think nothing of plunging it to the basement briefly to shake all the gold bugs out! They dont like people owning gold. Personally, I buy ammo stockpiles, never go down in value and IS the REAL gold in a total meltdown of society.
Right now my "would be investment money" is being used to paying down debt. In the absence of a good investment vehicle I would prefer to just shed some debt.
It doesn't take guts -- you just don't have enough fear yet. When you do the price will be a bit higher. What would be wrong with getting a couple of silver 1 ounce Eagles and just one little-bitty ounce of gold? It wouldn't break your bank and you'd be over the threshold of impetus. What could it hoit?
Moved
LOL summer of recovery. bidens in charge of the titanic, obamas on vacation
LOOK at you DEFEATIST zerohedgers! Whats the damn big deal? Youre all already resigned to some massive run-up? DOW futures up 30, big deal. Sell the futures pops.
401k withdrawals.. this money is not coming back, it's being spent on interest to bankers or overseas for oil, textiles, toys and everything else we buy overseas that we no longer make here. Thanks Clinton for all that "British Free Trade" agreements to ruin America you made.
Off topic, but have to vent. Mark Hains on CNBC may be the most retarded, smug, waste of skin 'presenter' they have. And he's up against stiff competition...
He is a maggot (lawyer) by training. Nuff said!
I coined an acronym for that prick one day after he attempted to shake me down on air:
Fat
Old
Arrogant
Douchebag
FOAD. Mark Haines is a FOAD.
Quality. Like that a lot.
Its my dream to smash Mark Haines in his doughy face with my fist repeatedly.
I used to like Mark, if for no other reason than he was somewhat iconoclastic.
No more. He's gotten on my nerves for some time. And the comb-over is the worst!
Let me state this again...The majority of "investors" seeking a "safe haven" in bond funds have no idea that they are investing in something that can drop in value, just like stocks. They are looking for safety and expect stable principal with 2-5% interest. Man oh man is there going to be hell to pay when rates finally begin to back up.
In 1994, I worked as a retail stockbroker. That year, rates backed up about 100-150 bps on the long end due to emerging market instability and assorted other factors. When this happened, bond fund NAVs started dropping, a little each day at first and then faster and faster. It got so bad that a very large mutual fund company in town actually had lines out there main office tower door and down the street of shareholders trying to liquidate their "safe" bond funds. The investors went to the fund offices to seek their redemptions because the 800#s were jammed day and night and no one could get through. When it was over and rates finally stabilized, many folks saw their "safe" fund NAVs drop 20-30%. Clients of mine that owned bond funds were seriously pissed off. One, an owner of the Alliance North American Government Bond Fund was so angry he wanted to sue my ass and run me out of town, all because his $50,000 safe investment went down to $40,000. ("Don't be sore, buy more" was my standard, wiseass answer. Another was: "I didn't say 7% was guaranteed. I said 7% would be rare, indeed!)
At any rate, this flight to safety in the bond market is going to end very badly for "average investors". They've been burned too many times in stocks and are now fleeing the equity markets weekly, as shown above. When the bond market crashes, they will shun bonds for years to come, too. The question is: what market will be left? To which market(s) will retirees go in seek of return post this final bubble?
Given that people usually look at what is working for others as they are losing money, I'd say they'll buy gold after the bubble. Just remove the time dimension from reality, and stupidity often makes a lot of sense.
No one is going to have money left to buy anything. This seems to be a point that professional investors don't get. What average Joe can scrape together will be spent on the basics (food, shelter), not long term investments.
TF,
I'm curious. What percentage of Americans do you think actually understand how bonds and bond funds work?
That's just it. Very, very few.
Some dipshit "advisor", either in person, on the radio or TV tells them that bonds and bond funds are "safe" alternatives to stocks. The average dope thinks their principal is safe and not at risk. Boy oh boy are they wrong!
Most don't even have a clue what mutual funds even are. When I worked for a retail broker back in the dark ages, I had clients calling up demanding to know who stole their money because their fund account values had dropped.
I find in casual conversations, otherwise well-educated people have absolutely no clue and think when interest rates go higher, their bond funds will do even better!
Bon voyage....
Far as Im concerned the only ones seeking safe haven in bonds is the FED, where its the spin cycle of death for them! WHO would be buying 10 year treasuries when you can get a higher yield in a damn 1 year CD??
bankrate.com shows that the highest 1-year CD rate is 148bps. Pretty easy for an unscrupulous advisor (redundant) to swing some old lady into a levered-up bond fund yielding 5 or 6.
Diethyl Ether, Bitchez!
"There is nothing so despicable as a man in the depths of an ether binge."
H. S. Thompson (may he RIP)
Not just a boycott, but demographics.
Looking at HS Dent's Spending and Innovation wave, North American spending has peaked between 2005 and 2010, and will decrease by ~10% between 2010 and 2022. Compare this to the straight-up doubling of its spending from 1985 and 2005. And from 2010 to 2060, no inflation, no deflation; jus flat. I'm guessing prices will go down due to lack of demand.
So,
Decreased spending by 10% + no inflation/deflation + leveraged in financial entities = not so rosie this upcoming this decade...
Edit:
1. The "50+Empty Nesters" and the "60+ Retired" are withdrawing the money so that they can live off of their savings.
2. Buying 10Yr 3% bonds doesn't seem so bad after all (at least if HS Dent's analysis is correct)
Help me out. Is this the same group of geniuses that bought NASDAQ at 5000, and were buying condos to flip 2 years back? Sounds like a derivative of the odd-lot indicator to me.
Combination of boredom, disgust, and need for cash.
So who is buying?
Timmah.
What people seem to be missing is that a lot if not the vast majority of this retail mutual fund outflow is not people scared of investing, or making a bet on weak equity performance. It is people pulling out money to subsidize living expenses. Fidelity reports 401(k) loans are hitting all-time highs. And they're not using those loans to make downpayments...
I just got a good laugh from yahoo finance. Some douche has a piece entitled "5 investing bubbles"
His verdicts: US Treasuries are not a bubble and Gold is "A major bubble".
http://finance.yahoo.com/focus-retirement/article/110440/5-investing-bubbles?mod=fidelity-managingwealth&cat=fidelity_2010_managing_wealth
Yahoo! Finance, bunch of D- journalism students with their soon-to-be unemployed fund manager contributors.
Didier Sornette aka "Bubble Boy"
http://www.youtube.com/watch?v=NJ7a9lMSwL8
Just another reason NOT to listen to what academics say regarding investing. What a fucking dope. If Didier were to pull his head out of his swiss arse, he might learn that gold is a currency devaluation hedge, not an inflation hedge.
Fuzzy-headed, swissy buffoon.
I posted elsewhere:
I see a disconnect. Our boys Faber and Schiff say that gold is not in a bubble because of the factors which make the PMs more popular. No need to go into the details here. If so, then the same factors can contribute to the popularity of bonds as well. Bubbles indicate fear and greed? If gold and bonds lend security and stability in uncertain economic environments then they are not in bubbles. Can't have it both ways. I really don't want to argue the fine points, just wanted to point out the possible philosophical disconnect.
I'm in the "bubbles are created by greed" camp for the most part. Bolstering my point above: I don't think either bonds or gold are being pumped for greed. It's stability and safety that are being sought. Both the U. S. and foreign markets will have to show some sanity and their governments demonstrate some sound policies before the two will be sold off. But I don't have a PhD in economics -- what do I know?
Wow, the market today is totally f%#@ed-up. It looks as though even the bots can't decide what "reality" to pursue.
Well, I find it refreshing to see the machines fight amongst themselves for a bit.
Nice to see a bit of balance creeping in to ZH comments, does this mean that maybe the Fed isn't running a massive ponzi scheme, that equities do not need to go down every time that there is a bad economic number that actually has nothing to do with corporate profitability and that maybe chasing a low yielding asset that is traded on a tick basis by leverage funds may not actually be the road to long term investment returns? Or will the comments return to normal after the break? Government Bonds are risk free in that they pay out at par and the coupon is guarranteed. Corporate bonds are lower risk than equities in that they pay interest before dividends. But almost all bonds are trading above par, so guaranteeing a capital loss if held to redemption. So do I really believe that McDonalds debt at 0.3% is better value than their equity at 3%? Or am I simply speculating that someone else will be more scared than me in 6 months time? And it's not like there is any leverage in the fixed income markets is it? People are stupid if they buy equities because of CNBC but really smart if they buy bonds or gold on the same basis. Discuss.
Um, what?
you just explained how everything is overpriced and guaranteed to provide negative returns beyond the immediate time frame
but it's not apparent that you get it. do you?
http://www.mademan.com/chickipedia/maria-bartiromo/photosgallery/Maria_b...
If you ignore what CNBC says and just look closely at their chests, you will find some things you might like to hit, hard!
For those who hate loading time (pun intended): http://tinyurl.com/27qtfrs
I personally dont think Maria Fartaroma is attractive in the least. The only one I find mildly attractive is Erin Burnette, but I hate that bitch so much I wouldnt even anger fuk her Marla style.
I would have been inclined to agree, but not after this:
http://tinyurl.com/27qtfrs
I think there's going to be a pop over the next 2 - 3 sessions. I'm waiting for this to re-short. 'Copter Ben may be the catalyst for it, we will see.
Watching the options, may put on more time premium so I don't get put against the wall for expiration this time...
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