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After Three Weeks, Bond Outflows Reverse As Revised Equity Inflows Barely Budge
Well, that lasted all of 3 weeks: after ICI reported outflows in taxable bond funds for all of the prior four weeks (for a whopping combined $5 billion after hundreds of billions in inflows in the past year), the bond inflows are once again back in the last week of 2010, as bond investors placed $2.5 billion with taxable bond funds. The only category that saw outflows was mutual bond funds, which in itself is obviously quite troubling as it indicates that the state funding situation is about to get rather dire especially in light of the non-renewal of the BAB program. Basically this is exactly as we suspected would happen: following the major drop in bond prices in December, investors are now back and are in fact more interested in buying bonds at more attractive prices. Which of course means that that other trend: inflows into equities is about to taper off as well, as money flows shift out from equities and into bonds once again. Indeed, last week's inflow of $335 million in domestic equity funds was revised to just $14 million, and the last week of 2010 saw another token (and probably soon to be revised downward again) inflow of just $493 million. Should the equity inflow indeed reverse to an outflow shortly, the propganda machine will be doubly confused to explain how, a mere few weeks after it made such a story out of the first inflow in 33 weeks, outflows are again back.
And yes, as we suspected, only major price shocks can push bond investors (read Baby Boomers who refuse to put their retirement money into stocks) away. Once price stability is back, so is the capital. Bernanke better be prepared to sacrifice the 5% on the 30 Year if he wants to generate another one-two weeks worth of equity inflows to make it appear that the dumbest money is finally back. Then 6%... Then 7%...
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Exactly. If you are a baby boomer, and I am, in your 50s after the last crash are you going to put a lifetime of supperannuation accumulation into this 'market'? No effing way, no matter how much they artificially ramp it day after day, year after year.
In fact it is because the Fed is manipulating markets that I will go nowhere near them at the moment, there is nothing natural about them at all, and bare not even the slightest resemblance to the economy now or in any future.
I only have oil exploration shares (and they got oil) and silver, of miner with resources entirely within Australia.
+100
The United States defaults on its national debt.
The dollar collapsed as the bond market crashed.
All world markets closed lock limit down.
These are the most beautiful words I ever heard.
Don't worry, it's only 14 trillion dollars.
End of 2010 -markets were screaming inflation start of 2011 they are now starting to scream deflation .The herd is going to get hurt riding this see saw as the pendulum swings back and forth until something breaks one way or the other
Isn't it true that one can take money out of an IRA penalty free when one achieves 59 years of age?
Isn't it also true that the baby boomers turn 65 this year?
Isn't it also true that the baby boomers huge demographic has dominated American economics since the late 1950s?
Isn't it also true that in the mid-1990s stock market bulls were talking about a tsunami of money into the stock market until 2010 when the baby boomers started to retire, as opposed to saving for retirement?
So there you go.
Except, you have big money moving into the US stock market of late, including but not limited to the Fed.
So there's some cross-currents for you.
Bizarre... I mean a conspiracy theorist would say that someone is trying to fake people into thinking that it is time to move into equities again. We all know that could never happen, though, because the "markets" and "media" are much much too large to be manipulated by anyone... Nothing to see here.. Move along..