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Can You Hear Me Now? 17th Weekly Fund Outflow As Equity Fund Redemptions Accelerate
This is just getting silly: perhaps the next update on ICI mutual fund flows should occur if there is an inflow for once...ever again. In the meantime, ICI reports we have just recorded the 17th consecutive weekly outflow from domestic equity mutual funds, and what's worse for mutual funds' depleted liquidity ratios, it is now accelerating, hitting a total of $4.3 billion, a more than 50% increase from last week's $2.7 billion. YTD outflows have now hit $54 billion, as ever more capital is going into far safer fixed income instruments. As a reminder, here is what Rosenberg said on the issue yesterday: "As for liquidity ratios, equity funds portfolio manages have theirs at an all-time low of 3.4%, down from 3.8% in June. Tack on the fact that there are really not very many shorts to be covered – since the market peaked in April, short interest is 4.3% of the S&P 500 market cap (in August 2008 it was 6%) and there’s not a whole lot of underlying fund-flow support for the stock market here." As for this being a contrarian signal, hopefully all those who see this as a buying opportunity can also find a way to make the now retiring baby boomers about 10 years younger and force them away from fixed income capital reallocation. Oh, and fix the broken market and restore investor confidence that the casino is only modestly rigged.
In the meantime, no matter what the market does (and somehow it has been flat during the entire period of record redemptions: good to know someone is putting capital into stocks), on a short-term basis, nobody wants to touch it with a ten foot pole. Retail is no longer fascinated by speculating and day trading: after all why should they - they get better odds in Vegas... where the decor puts the aging CNBC female anchor crew to shame.
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I have been waiting for this post. All along the monthly ICI numbers have been very telling. Additionally, the yearly ICI numbers have shown a negative outflow for 2007, 2008, and 2009 in domestic equities. 2010 will most likely be another negative outflow year unless some miracle happens.
Speaking of miracles, the market moves on Tuesday 8/31 at 3:59 and yesterday, 9/1, are very telling as well. My best guess is that some in the industry are trying to reverse the flow or slow the negative flow. What was in the news? Bull market returns… All for mass consumption.
This was no normal short squeeze. Someone was planning it for Wednesday, but it got leaked out on Tuesday. Maybe the big boys just wanted to profit from this orchestrated squeeze. However, I believe this was also an attempt to reverse the flow of retail out the market.
Well shall see over the next few weeks if works. If not…
Game Over.
AGREE WITH YOU CTOTALLY. COMPLETELY ORCHESTRATED - -ACROSS THE POND AS WELL. OBVIOUSLY THE CENTRAL BANKS.
Not "Game Over". The correct phrase is "Capital Controls".
Isn't that how it typically plays out in Banana Republics?
No, wait. I just heard two douchebags on CNBS say this was a terrific contrarian indicator. Investor bearishness lowest since Feb 2009. The perfect sign that the market was headed much higher. One of the douchebags said the S&P would trade through 1500 in 2012.
What these pricks don't understand is that the jig is up. Their game is over. The "hoi polloi" is onto them and they are no longer willing to entrust them with what remains of their hard-earned dollars.
This whole notion if contrarian indicator is being so overused that most of these mentions are getting rather silly. For every contra-opinon, there seems to be a contra-contra-opinion and so on. So many people are saying equities are at a bottom because so many other people are being bearish ! So which contra-side are you on ? :-)
People bailing out of 401K to survive is bullish for equities ? Yeah, right.
The reasoning is simple. As turd said, the jig is up. The contrarian indicator is somewhat vague, mysterious, not quantifiable. Therefore the cheerleaders can use it to pump a position much more than the old stale fundamental basis they tried to pump for the past decade. They are taking giant panic breaths at this point, desperate to keep ratings.
Exactly. The douchebag that said the S&P was headed through 1500 mentioned zero fundamentals. He was responding to a question about how "buy and hold" hasn't worked for 10 years. He said "that's because we've been a in a secular bear market but that market is ending and we are going to break out through 1500 by sometime in 2012". So, essentially, he's just guessing. It's like me saying "we've been in an elliptical orbit around the sun but that orbit is ending and I think we're going to begin crashing into other planets by 2012". No facts or fundamentals to back it up, just opinion.
Now the fun part is: this allowed CNBS to put, at the bottom of the screen, " IdiotBoy of Douchebag Advisors expects 1500 on S&P soon". Fits their agenda perfectly.
If contrarian indicators work then the market is not a market. Markets act in the following way: When demand is greater than supply then price goes up. When supply is greater than demand then price goes down.
How does this fit with the "common Wall Street mythos"?
It is kind of like saying that short selling is a way to achieve price discovery. In fact short selling is a way to increase supply so that price dynamics in a market require that price decline. Unless of course the stock market is not a market and simply a Ponzi scheme designd to control money.
I don't know who said it the other day, but it hit me like a ton of bricks. Fiat money deposited in a bank is simply an unsecured loan to the bank... and yet we are restricted in how we can take money out of the bank?
well said
And to think that some people put their gold in the bank's "safety deposit box".
The true contrary position here is that the United States Government will fail upon the collapse of Western fiat "money" -
As this becomes a game of "he doesn't know that I know that he knows that I know", fundamentals will come to rule again. Game theory is cute, and makes for a nice movie, but it can't rule over reality once everyone is using it, same for technicals.
"People bailing out of 401K to survive is bullish for equities ? Yeah, right."
It's impossible for someone living in the Hamptons to understand that concept. It'd be easier to teach a sloth how to run.
Yes, and demographic related withdrawals are going to pick up steam as the more affluent middle class baby boomers retire in ever increasing amounts, removing money from their retirement accounts. The younger generation will pick up a portion of the jobs at lower pay, but they will not be able to replace the money of the boomers in the markets nor will they trust Wall Street the way that their parents trusted Wall Street.
Numbers and trust, both declining indices.
and in a nutshell, you have happened upon the reason the banks engineered the crises in 08....and stole the US treasury before Georgie Boy left office. He had promised them that they would get the social security money when he privatized it. that didn't happen.
so they simply stole what they thought they had coming.
+27
up up down down left right left right b a b a select start
Right, 'market abandoned' except for robots, great contrarian bullish indicator.
Good post turd fergusen, YES what they dont get is the peasantry sees it all as fraud now, the game is over I dont care how much the whores cross their legs and apply brightest red lipstick! The retail investor is GONE, leaving the hollow markets to the bot traders to play with themselves in the corner!
+1
ZH should put in a REC button so posts like these, so true and coffee-spitting-funny at the same time, get their due.
They fail to see that people are not "bailing" out of the market for the hell of it. They are literally cashing in to get money to survive. They are living off the money -- if they can spin that as bullish best of luck to them. But I guarantee they will think 08 was a walk in the park once this really turns...
Agree. I don't think the average retail investor locks himself into multi year treasury bonds while he/she is unemployed, lost the home ATM card and is trying to feed his family.
They cash out any/everything they can to survive hoping for a bailout down the road, squat in their soon to be foreclosed home and try to make the handout checks + liquid assets last as long as possible.
If they gave you good advice then you couldn't tell if they were douchebags.
The market rigging and outright theft, combined with poor returns for a decade and a bad economy, is just too much for Joe Sixpack to ignore anymore. The game is certainly up.
Turd,
Agreed, I think you need to change the name for Douchebags, to Disposable Enemas...........
Because that's what happening to their precious.
The SHIT has been flushed.
How much are inflows to index funds and ETFs?
Its been flowing in bonds, both taxable and munis.
bada,
Oh, Sheet............from worse to BAD.
The sheeple have awakened and are heading for the exits. The market is now an electronic playground.
Sort of like the movie "Wargames", computers playing checkers with each other or themselves.
I unfortunately don't think so. The sheeple are reallocating their funds to ..."the much safer"... bond market. It is safe until it isn't. Ultimate trade to trigger the end game.
Good luck all!
I don't think so, it's only TBTF banks exchanging worthless mortgages to the FED for dollars, with the condition that they buy treasuries. The end game is when the TBTF banks (and China) want to cash out the treasuries.
I know of no retail investor in my circle buying treasuries.
Where do you think the pensions will end up being invested?
Good luck.
And convince all the insiders who sold FIVE HUNDRED BILLION, according to the July report.
I think I understand now. Once they sell, they can't sell again. Therefore, it is bullish because there are less people to sell their stock.
In fact, if we could just remove all retail from stocks only then can the market reach its full potential.
My thoughts exactly...it actually facilitates their end goal. Shoot this fucker to the moon.
Agreed.
The sheeple always represent the dumb money who are now gathered(hiding out) in the Treasure Cave...i mean along the Treasury Curve.The 'Fed Heads' have set the perfect deflationary trap as the baby boomers have taken the bait.The time has come ,its time to do the 'ol switcheroo' and pump the stock markets to oblivion once the entire treasury curve is monetized by Bernanke & Co .The sheeple will be left holding the bag of course.......AGAIN!
This mission will be then complete.
Completeness,peace(wholeness) in hebrew= shalom which is Ben's middle name.....its all written in the name folks......its all in the name.
In this case, I disagree. The money isn't flowing out of equity mutual funds into bonds or bond funds, it is being used to live on. So it isn't a flight to perceived safety, it is a flight to survival. Big difference.
It's probably a proportion of both. There is a frightening lack of savings amongst even our 'professional' peeps though. Stunning, in fact.
Irrelevant, they are going to ramrod this shit to the moon. I can feel it now. They are totally going for broke and they are NOT going to let this go down again.
Seriously, with less retail sheep in the game, isn't this actually easier to accomplish?
'Ramrod this shit to the moon'...
But wait, what about their calls for more massive stimulus and Bernankes conundrum of 'cant have it both ways'? They want markets higher, AND call for more massive money printing? Can NOT have it both ways suckers, either pump markets OR tank markets to print.
Sure they can have it both ways, they control the vertical and the horizontal. How can gold, bolds, and equities all climb?
Frankly, they can do whatever the fuck they want to do. They can't be audited, laws don't apply, and the supervising agencies are in on it...all the way to the oval office.
Sorry, the old rules don't apply because, currently, there are no rules.
There are no rules until someone snaps, throws Bernanke into a van with a hood over his head, and mails body parts to the media press release style. Think that WONT eventually happen, fools?
+1 last (2).
I agree. FED will NOT allow this market to fall. No matter what the consequences.
Boiler,
"Sorry, the old rules don't apply because, currently, there are no rules."
The old rules do not apply, because in reality, there never WERE any rules, just a public perception of there BEING rules.
The Jig is up, time for the Vig.
I think they are just trying to keep the basis up so when tomorrows number sucks wind and there is a sell off it doesn't blow through 1040 like a hot knife through butter causing a fast and ferocious move to the downside. They all know it's coming -- they are just thinking they can soften the blow. If the job number was going to be ok to bullish do you really think Christina Roemer would have had her last day be yesterday? She would have stayed through the week to take credit for the great recovery.
I really doubt it only because there has been more than enough shit news already to do that. They'll just shove it upward anyway, IMO.
mmmm, just eyeballing that chart...if anything, outflows do seem to be a contrarian indicator.
That said, I am firmly in the camp that equities should be crashing now.
Me too, I hope they take Precious Metals with them too, would really like to buy more. I hope I'm not making a mistake by waiting for the PM's.
But as an earlier article stated, Ben can't QE with stocks and PM's at these levels or it will guarantee a dollar collapse and the end of the (Not)Federal Reserve. Not sure if that thesis is right, we'll see.
Ben can't QE with stocks and PM's at these levels
No, he can't QE with crude >$65/bbl and wheat >$6/bushel. Those are real constraints.
If there is one thing I have figured out in the last few years, it's this: Our masters are constantly tapping the brakes, floating test balloons and testing the water to see how much the herd will put up with. They then proceed up to the point where the herd starts to roil and the bleating gets more high-pitched; then back off. Repeat as necessary until desired results are attained. It is entirely herd control, Democracy is done.
SMG,
"I hope I'm not making a mistake by waiting for the PM's."
IF you do not have your core position in hand, you are TOO late....But, you still have time, before it's goes totally out of reach.(do not get caught with nothing,even if it's just Slvr, get some protection NOW).
ICI's long term mutual money flow historical data from 1/2007 can be found here for anyone interested:
http://www.ici.org/pdf/flows_data_2010.pdf
Mr. Tyler,
When the market doesn't behave as you wish it to behave it does NOT mean that the market is broken.
Maybe, you simply don't know how to read it.
And again, I repeat what I said 2 weeks ago:
When the mass of the people is out of the market, this is the best time to go long, since most of the people are stupid, greedy and panic quickly.
Aside from the market being soon to be proven to be completely broken (see here "SEC Investigating HFT Quote Stuffing And Sub-Pennying") you are right that it is perfectly ok.
I agree with you that there is a major problem with all this algo machines.
BUT, it doesn't mean that the market is "broken". It simply means that it has new rules and we need to adjust to it and start taking it into account when trading.
Human traders don't "adust" to HFT and algos, they adjust to you
Enjoy having your pocket picked on every trade, moron.
Trading in the robot controlled market is like paying a multi-hundred dollar fee for each trade. If you want to "adjust" to having a giant robotic dong shoved up your backside, be my guest, but you're arguing semantics while there are barbarians at the gates.
So you know the casino is rigged, yet you still want to gamble?
Good Luck. Have fun playing hot potatoe with the algos.
I'm sure you'll win.
Pladizow exactly, just a bunch of jibber jabber from these folks about 'theyll shoot it to the moon, you just watch'...then when the markets suddenly tank -2%, theyll all be here saying 'YEA see I told ya they'd tank it'! Buncha snoogins.
disagree as you may (and i don't have any confidence in the rationality of today's market either), but boilermaker is making a valid point...
- with less players (record retail exits), there's less 'real' price discovery (and often less volume).
- with less participation/interference/volume, the remaining players (in cahoots) can *much* more easily 'move' the market - and *up* is where the big players (pensions, etc.) want/need it to go (right?).
the cause/effect is fact. the results are speculation.
a question i would also ask is whether or not it can be sustained (by the FED et.al.) or perhaps, might external interference in such a market also 'break' things (e.g. a russian/chinese dump on the low-volume market is much more viable in these conditions). black swans or intentional... same result.
boilermaker is indicating that this non-retail market has differing characteristics than the 'average' historic market. the market context *is* changing. this is not a silly train of thought.
i think this is big. i think there is a joe-six-pack paradigm shift happening in the background, and where the volume goes, so goes whatever's left of the market. ignore at your peril
question: if everyone goes to 'cash', how does the cash bubble pop? obviously inflation is the primary risk, but they're not doing so well at that right now. perhaps a straight monetary revaluation, ala N-Korea? when?
it doesn't mean that the market is "broken". It simply means that it has new rules and we need to adjust to it and start taking it into account when trading
LMAO!!!! AAHHHAHAHAHAHA! Ohhhh kay, that was hysterical. lol
heh
maybe his wording was weak, but obviously, if we don't respond to "what is" (vs either what we're being told "what is", or worse, "what was"), then we're going to paying/losing to those that do respond to "what is". period. sadly they usually know "what is" well-before we (retail) even get a hint...
i think we're being led to slaughter in terms of what we're being told "what is". the market dynamics are always changing, but today's casino is very different than it was 3 years ago. study or stay away.
"ladies and gentlemen, please place your bets"
I respect the underlying idea of what you are saying i.knoknot, however the more things change the more the stay the same. Investing (Fixed Income, Commodities, Equities etc.) has always been and will always be about finding value and trying to capitalize on it. There have been periods over the markets history where participants have been lulled into looking at things other then fundamental valuation. Aside from the current episode, the next closest is what happened in 1999-2000. The illusion lasts a while, sometimes longer then even some experts think it can... but it ALWAYS comes back to valuation and fundamentals. For someone to say this market isn't broken and this is the "new era".... I'm sorry, that's just hysterical.
i treat TA as a symptom/response to good FA, meaning i prefer FA - even to the point i would assert that TA's responses to market graphs couldn't exist without FA.
that said, good FA is only as good as the data we (esp. us retail folk) are allowed to see.
clearly, the best of judgements, when based on faulty data, will yield the obvious result... and that's where i indicate the need to "study or stay away".
appreciating your history here at ZH, we've both seen oodles of blows to the credibility of rating agencies (moody's etc.), bent accounting (FASB changes), out and out fraud with no SEC response, and of course endless "better/worse than expected" BLS and similar reports.
i have no quarrel with FA as *the* timeless and proper way to baseline investing (unless you can be part of great insider deals :^), but i have complete confidence that most data being released anymore is worse than useless, it's outright dangerous. knowing that can be a very useful investment tool...
perhaps the original poster was indicating such an 'era' of politicized 'value' - which is an auditable change in our context and worth mention.
but perhaps not. if not, then the joke's on me... cheers.
Adjust to it. Cool. Then what? Is that it? "Major problem" solved?
– There's a leak in the ship!
– Yes, that is a problem, but the ship is not broken, just adjust to it!
– But people are abandoning the ship!
– It's just the new rules. We just need to take that into account when raising sails. Less sails I suppose! Carry on!
(And keep the fingers in the dam. http://www.youtube.com/watch?v=_1Vn9OwDjgQ )
"When the mass of the people is out of the market, this is the best time to go long, since most of the people are stupid, greedy and panic quickly"
No market, no government. Do you feel the same way about revolutions? Best to join the crown when they're getting out the Guillotines?
OK you high-roller you, how would you "read" this market?
You seem to be suggesting that this is the best time to go long. That seems retarded.
I don't understand why all of you are so "locked" into the conclusion that the market is broken/going to crash when retail investors are out !
Look at the 2009 rally. Do you really think that retail investors put their money in Feb/Mar 2009 or took it out ?
It is a well-known fact that retail investors join rallies last and exit bear markets last. They simply act from their guts and "feelings".
This is my opinion and everyone entitle to their own opinion. Please do not cancel my opinion just because it doesn't match your agenda.
Tell that to Mr. Market circa 1939. And on the 2009 rally, you really think it's healthy market behavior to have freshly printed money flowing into the stock market? You might want to look at some historical examples of what follows that type of action by a government.
Sometimes people are just driven from the markets, and they don't come back for a generation, or more. The fact that you think this is business as usual singles you out as a naive newbie on the trading floor. Hell, if you'd been around even for 5 years you could see that this market is hopelessly broken. If you've been around for 20 or 30 years, you're probably posting from a fortified mountain compound via satellite.
tmosely, Stockholm Syndrome has overtaken many Zerohedge people. Theyve fallen into the trap, and are now operating based on THEIR terms! Sad and utterly pathetic. Spineless weasel 'great smart traders' NEVER THINK to combine forces and beat them at their own game! NAH, got to just sit there and take it like battered housewives. PATHETIC nation deserves the total destruction it is getting!
freaky, I was just talking about the Stockholm Syndrome in a criminal appeal and I thought of this site, some people, and the same thing.
Simply terrible post gabbayo, really horrible and made me quite sad.
Your opinion has been cancelled due to lack of contact with reality, agenda's aren't involved.
jeez - who junked gabbayo on *this* one.
g's comment is simple and sane. i rather hope he/she is right. but i don't agree.
why the junking? what's the logic on this one. it's an autonomous opinion... consider, argue, but junk it?
FWIW, i think a reset is coming, but it's not only based on this indicator.
Yes, you are entitled to your opinion. I have not junked you. Rally on!
'Best time to go long, when the rigged casino is empty'
Well I guess thats true, if you care NOTHING about any actual valuations or future crashes. Why would you go in here, when the markets have no real business at even HALF this valuation? JUst cuz?
Ahhh Gabby
Most of the criminal class in Wall Street are too clever by half (ergo stupid),greedy, and panic quickly. But their co-conspirators cover their losses with taxpayer funds and credit; so no problem, no risk for them. They pay themselves ill-gotten bonuses from the cash at the margin.
No one is going into the market until their personal life stabilizes (a long time from now) and only pension funds (pump the market Leo) and the patty cake criminal banksters and criminal hedgies support this market.
This disconnect between Main Street and Wall Street will take a long time to repair.
Perhaps we can get some outsourcing of the Central Planning Committee to lower our domestic cost.
Entrepreneurs are in short supply and local party bosses (Buffet and Gross) sing the party song.
Good Luck with that theory of yours.
Christ - here comes another 2% rally
It's too much, too quickly. All we have done is test the top of the technical range. This volatility is proof positive of how sickly this market has become. The down channel continues.
Well, if there ever were a week with a positive inflow then I would hope to be able to read about it on ZH. But give the track record -- e.g. repeated posts of BDI declines, until BDI stopped declining at which point we stopped hearing about it on ZH -- I won't hold my breath. This is an interesting and useful site, but the bias is less helpful. At least fact that bias is so obvious makes a clear warning to the reader.
Once the dead cat bounce from the year lows hit a month ago is completed, we promise to recommence our daily observations of its downward slope.
great, thanks. I look forward to it.
The BDI will keep climbing till the end of october because of rising in en exports from europe and azia. The only thing acutally keeping it down is the increase in ships this year and in this way, the BDI is turning out a bad indicator.
It's not even a good indicator anymore for earnings in shipping companies as they are starting to work with long term contracts.
Kiss-ass.
Sheep
Youre the damn sheep, arm flapping turd.
For once I agree with you, SD. People in the shipping business do not regard the BDI with great significance. Having said that, they are not exactly happy with their lot either.
Not sure why we (as traders) want to restore investor confidence? We want the retail traders to be completely disilluioned with the market as a "safe bet" or "safe investment". Because stocks are a risky asset and need to be treated that way, especially by mom and pop 401k investors.
Retail investors are slowly realizing the market is not the riskless & fool-proof way to earn a steady income, it is purely made for speculation. For 20 years these lemmings thought they couldn't go wrong if they just put 100% of their capital into equities. Fail.
At some point the mutual fund managers will have to start selling stock to meet redemptions no ?
Who will they sell their stock to? R2D2?
Zackly, and precisely WTH you bust down the doors NOW, not to be the Dood holding the SHORT straw..............last one out,has a date night with Bawney Fwannk.
Would someone with polical/market timing skills offer when they would expect the fed to take the equity market down for the purpose of justifying QE2.. bearing in mind these crooks will announce this news with an hour left in option expiration... so which is the most probable month ? anyone care to hazard a guess ?
If the public is bearish, the moneyed professionals (or computers) that take advantage of the public will find opportunities to send stocks up. Hence I think a crash is unlikely, unless there is something external to stampede the public. Even after that possibility, the stock market would likely head up afterwards. Looks like the sucker play is buying US bonds.
Don't tell that to Treasury!
LMAO, reading many posts here, people have twisted their brains back into total 'tardation!
Typical sheeple behaviour, ignore whats plainly obvious and develop Stockholm Syndrome, sympathy and belief in your captors.
Theyve convinced themselves, yet again, that its all up from here? Dream on, stupid sheeps.
PEOPLE NEED MONEY!! MORTGAGE, COLLEGE, ETC..... WHERE IS THE MYSTERY????
RIGHT Rufus! People NEED free-lunch borrowing! THEY NEED SLAVERY! And WILL kill to get it! The sheeple feel VERY NERVOUS when theyre not in central bankster servitude!
They have to print, BEFORE the elections, for 'we saved you dumb sheeple again' Oct Surprise, youll see a big market downside event quite soon. Pull your heads out of your asses people. Sheesh, I thought the smart folk hung around Zerohedge, not panicky battered housewives.
I agree completely! Tank and print prior to elections and I'm ready for the Fed head fake in case they go Plan B. But not all hedging housewives are panicked or battered, so ease up. Some of us may look like the babes you guys post and have really high IQs too.
as long as they buy their own paper they canmove the market as high as they want the trick however is not the buying it is the selling.
OK unionbroker...so theyre going to move the market higher, AND sound the panic alarm for more massive Q/E? How does that work exactly?
Shite like this makes *glad* to not be retiring for another 20 years....(or longer, let's see how long the suck lasts!)
The market in paper of all kinds is in a precarious dynamic balance. It is founded in deceit (yes this new and improved paper is good paper-FASB) and has the blessing and support of the Central Planning Committee.
Unchecked money printing, limitless credit in the paper economy, and exponential debt growth will not end well, but it will end.
You cannot export all your core manufacturing jobs, reward criminal tricksters (like rock stars), and pretend that your enemies are friends. Good Luck with that China thing.
You can run around like scattering mice and be rewarded with the odd tidbit, but the American economy has had its Humpty-Dumpty fall. Putting it together again with the tired old tools of the past ain't going to do it.
These boys still don't get it. The pumped up over-priced illusion of inflated (and inflating) assets is not real growth in the economy. Without real macro growth in the economy, debts and interest (of the exponentially rising kind) will not be paid.
More left for the rest of us still in equities.
Not everyone can be, or get 'rich' from equities.
Same sort of nonsense happened in Germany prior to the Weimar hyperinflation. The entirety of the Daimler Benz company was only worth 370 cars, or something dumb like that.
'(and somehow it has been flat during the entire period of record redemptions: good to know someone is putting capital into stocks)'
Tyler - Excellent point, totally pique my interest & then I remembered that on 1 August 2010 - Cheering the comeback of the stock market, Greenspan tells NBC's "Meet the Press" that a rising stock market will do more to stimulate the economy than any of the remedies now being discussed."
Betcha Uncle Ben & Cousin Timmy caught THAT episode!I agree with Boilermaker, as much as I dislike the charade played by Wall St. & the Quacks @ CNBC, with money for free @ the ol' discount window & interest rates unable to rise substantially in this environment, I am afraid the manipulation will continue until the mid-term elections -
Tyler,
I appreciate the significance of sustained outflows vs. inflows and what that says about investors' preferences for equities, but aren't we talking about money that's sloshing around rather than exiting the markets?
According to the ISI report domestic mutual funds held about 4.9 trillion dollars in assets, so 54 billion in net outflows represents a shift of about 1.1%. I don't have comparable numbers for bond and international stock fund inflows, but YTD as of July bond funds had added about 185 billion in new assets while domestic stock funds lost 1.7 billion.
There's clearly retail appetite out there, but tradition dictates it has to buy in at the top so it's piling into the inflating bond bubble.
Tyler,
I appreciate the significance of sustained outflows vs. inflows and what that says about investors' preferences for equities, but aren't we talking about money that's sloshing around rather than exiting the markets?
According to the ISI report domestic mutual funds held about 4.9 trillion dollars in assets, so 54 billion in net outflows represents a shift of about 1.1%. I don't have comparable numbers for bond and international stock fund inflows, but YTD as of July bond funds had added about 185 billion in new assets while domestic stock funds lost 1.7 billion.
There's clearly retail appetite out there, but tradition dictates it has to buy in at the top so it's piling into the inflating bond bubble.
It is just one week closer to HFT cannibalism!!!
Seems like every month the following is happening:
1) Pension fund and 401K money hits the premarket on the first day of the month.
2) Short squeeze ensues
3) Over the next several days this money is pulled from the market, leaving the pensioners and retirement savers with loses in their accounts (Institutions are like sharks in a feeding frenzie at the beginning of the month).
This pattern seems to be repeating as fewer Baby Boomers are working and unable to put money into retirement accounts. Thus, the ponzi scheme can't be stoked. Those trying to save for retirement are having their pockets cleaned.
oh yeah, japanese housewive's attn shifted to FX trading
Retail has not caught on to anything. They are reacting to what happened ten years ago and to their current need for cash, as has been mentioned in the discussions here and elsewhere. Stay the course, baby. We are about two thirds of the way through this thing.
Retail seems alive and well from where I sit, although a bit skittish. Still an awful lot of money in 401Ks folks. The money is just flowing into fixed income. What are people to do? Yes withdrawals are up but most in the form of loans. Despite what some people here have done and advocate, I don't know a whole lot of people willing to take the onerous hits in penalties, fees and taxes to withdraw all funds.
Don't underestimate the delay to the upcoming crash. We're early to the funeral, just like the real estate/bank shorts were in 2005.
The creation of money is not understood by 98% of the American public and they are gullible for another run to 1500+. I think we'll see equity fund inflows before they let the guillotine drop, and another puzzling rally is needed for that to happen.
Total market cap on the NYSE alone is $12 trillion or so. So that $50 billion retail outflow is, pessimistically, 40 basis points. Invisible against daily volatility, especially when it happens over the course of a year.
This is probably bad news if you're in the business of collecting 100bps-plus for choosing carefully among assets all of which are growing at an average rate of zero, but otherwise not that worrisome.
So what you're saying is that it's a medium-term low?
Ex-sheeple here,I finally took my nose off the grindstone in "08-studied real hard and fast- and didn't care for what I saw. I closed 2 IRA's took the beating and now have physical pm. I still have a matching 401K, so that's easy money @full match up to first 6 percent of gross contrbution ( parked in a worthless mm for now). PM is already up enough to cover the penalties. my money will never be used by them and taken from me again. screw- 'em, shoulda been in pm and cash all along. I considered bonds for about 20 mins then pulled the plug-sent a bank wire to pm dealer, I sleep well. And since I only contrbute 6 % of gross I am happy to let it double in a money market. just waiting to close that one too. preferably due to retirement in 2025 not lay off in 2011.
this is my first post here, I enjoy this site and have learned a lot from some of you long time posters- lots of knowledge here and the funny stuff is damn funny most of the time. thanks from an average joe
Grabbed your sack and cashed out eh? PM's covered your penalties. Good for you - seriously. I just can't do it, but I did get out of equities at least...
Like the dude said, 'A man has got to know his limitations', one of mine being all the wall st hocus pocus. I was one of the old buy and hold donaters since '85 and then around 06-07 the statements did sort of a shape change thingy on me, didn't seem to match up to the other math ( market up me down or mostly flat) of course I wrote it off to me not knowing what the hell is was doing buying and selling stocks or funds etc and counting myself lucky to be gaining at all so I let it ride. the rest is history- things turned a little sour and I bailed asap. I feel fortunate to have been in a position to do that, too many got caught trusting others with their well being. I intend to safeguard my good fortune diligently.
Sittinr here on the East coast of Canada, eating bon bons and drinking apple jack wine I had a "moment" as I waited to get fucking obliterated from Earl in a couple days. The UPS guy just dropped off my 10 - 100 ounce silver bars that I bought on the dip this week.
Yes hedgers it occurred to me. In about 36 months I'll take one of these bars and probably half my neighborhood/
yes dear friends if we survive the Earlmeister my future is bright.
Oh I forgot the ironic part. here I am buying PM's for 10 fucking years and a storm wipes me out.
too funny.....
although I'm sure the PM pundits have an answer for it.
Fate maybe?
I must admit I havent read all the comments in the post so I dont know if anyone has touch this subject. But is anybody considering that this big outflow might be because people are switching from mutual funds to ETFs? As far as I understand ETFs arent counted in these numbers and if you look at other data (Lipper) then it wont show the same very bleak outflow. Any ideas
possible. any theories as to why and why now?
mine flowed into a big steel box made by mosler
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Let's say a person is old enough to take out their 401k without a penalty; should they take it out and invest it themselves or roll it over into an IRA?
Delaying paying the tax by rolling over into the IRA means you get more time for tax-free growth...great, BUT, when you do take it out eventually, you will pay the income tax rate, correct?
On the other hand, if you take out the 401k and put in the bank, and then invest it yourself, you take the initial hit, so you have less investment capital, but all your subsequenty 70-693 profits will be taxed at the cap gains rate...which is substantially lower than the income tax rate.
It seems to me that if you expect to make much profit from your post-withdrawel/rollover investments, then the second option would make more sense, as those profits would be taxed at a lower rate.
Maybe there are too many variables to get a straight answer, I don't know..anybody have an opinion?
Honestly, I'd recommend the Rollover Plan. The reason why, is because your
money can continue to grow tax free. Or a better way of looking at it, is
the money you would have given to the Government can stay with you and
make money.
Then when its time to take money out, you can control the amount you
take out and thus control what your Income Tax will be.. :) You just
have to do some planning before you make larger purchases. Maybe figure
out what you normally will deduct to just pay the bills every month.
Then when you want that boat, RV, whatever, 83-640 you can split big withdraws
between Dec.31st and Jan 1st of the new year which might keep you in a
lower tax bracket.
...and while all this is going on, your big lump sum that you never paid to
the Government in taxes continues to grow tax free.
Another way to look at it, is like this.. You have $1,000,000. You could
either take it all and pay Uncle Sam + State $400,000 and have $600,000
to spend tax free or reinvest and start paying Cap.Gains on. Or you could
keep the $1,000,000, invest it into something yielding 5% returns,
get paid $50,000/yrs from MB2-631 the interest, pay incomes taxes on that, and
maintain your $1,000,000 bucks forever. Or Invest in dividend paying
companies, get a changing divided rate, but watch your $1,000,000 grow
over time as those stocks grow in value.
Its your call, but I'd do the rollover and tell Uncle Sam that you'll pay him
pennies over time and you'll decide which tax rate you'll fall into each year.