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Domestic Equity Fund Flows Again Negative For Week Of March 24, $3.5 Billion In Outflows Year To Date
The broader public, where the first baby boomers begin retiring this year, continues rotating out of equities and into the safety of bonds. The ICI just disclosed that fund flows for domestic equity mutual funds turned negative for the week of March 24 to the tune of almost $1 billion, after a substantial spike the week before. This occurred even as the market has barely had a single down day in the past two months. Year To Date the outflows have now hit a massive $3.5 billion, surprising when considering the performance of the actual stock market, which continues being bid up into the stratosphere by Primary Dealers, or as Rosenberg affectionately calls them, Pig Farmers, using free Fed money, as they merely trade with nobody but each other in a disappearing volume game of musical chairs in which each and everyone is just focused on the exit strategy and getting the market to a sufficiently high level where a 30% "bidless" drop doesn't destroy too many.
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Quite a show watching the tumbleweeds roll across the trading floors as theres only 1 direction for the daily chart, always up. And when there is any drop at all like yesterday, its immediately recovered plus a bit upon the next days open.
I dont care what the crystal ball gazers and chicken bone readers say, this certainly doesnt end well as history clearly shows!
But... how is this possible? The stock market is up, and everyone is happy.
Sarcasm <OFF>
And commentators say that the American people are stupid. Not sure the timing, but the last laugh will be on the bankers. Let's see them ask for another bailout after they just issued record high bonuses in the middle of a depression. We gonna have us a Bank of Obama before 2012.
This doesn't make sense to me, the investing public is still staying conservative after a huge 60%+ rally?? I would think that they would be falling over themselves to get into the market. I mean I usually get my stock tips from my cab driver, my dentist, and at the barber...I don't know what to do if they aren't talking about their stocks!
This thing won't end until we see record 'INflows' from the public.
The "investing public" follows a Rayleigh distribution (of approx. beta = 0.5) from clueless to semi-conscious. After the March '09 lows, most of those at the low end - who's investing strategy is usually buy high, sell low - lost whatever $ they had left and are thus unable to jump in when normally expected. The semi-conscious with a few remaining $ got back in after the July lows and are now bailing in fear over the same fate that occurred to the lower end of the curve.
An odd side effect of the Lehman collapse is that it cleared most of the idiots out of the markets. And as reported several times on ZH, that raises the question of just who is now going to buy this market when it rolls over. Kind of like killing the family cow...
This outflow from equity funds is comparable to a 1/2" garden hose draining the basement while the fire department is blasting gasoline from six 5" fire hoses into the living room to keep the fire going. Yes, you heard that right. After all, according to Fahrenheit 451, the fire department is supposed to set fires, not put them out. Get used to it.
http://en.wikipedia.org/wiki/Fahrenheit_451
http://www.amazon.com/Fahrenheit-451-Ray-Bradbury/dp/B000HB2G5O/ref=sr_1_3?ie=UTF8&s=books&qid=1270139007&sr=8-3
I continue to view the tape with morbid curiosity as I go about my daily routine of mundane tasks here at work. I often find myself wondering if its even worth my bother, maybe I should just tune out of ZH and go back to partying in the USA.
Obviously I'm wrong to think that this couldn't possibly end badly..there's no end in sight and the worse things get, the higher prices get bid.
I have already capitalized a small business with my savings so I have a vested interest in seeing things get better in the world...ill be ready to open the doors debt free in a couple of months but I really feel like the great illusion will be deflated very very soon..shouldve happened already it seems.
My sense of reality is about to break if something doesn't shake, and soon. I'm tired of wondering what the hell is wrong with me…
Obama has told the boyz to get the market back up. He knows if the baby boomers start cashing out, 30% underwater, the spending power of the US consumer is shot to shit. The banks are not totally comfortable, but they have no choice, and anyway, they will make their money and get out of town before it blows up. What we are talking about is personal wealth versus public indebtedness, but what Barry doesn't get is that wealth is a relative concept. It's not how many Dollars you get per week, it's what you can afford with it that counts.
All I know is this is not going to end well. We have 18 months at the most before the whol house of cards comes crashing down, unless they manage to find massive amounts of oil in Alaska, that is, then we're probably good for another decade or so...
We know what theyre doing, extend and pretend, but to what end? How does it benefit them to pump up futures daily, just to live to pump another day?
Does anyone have an endgame scenario theory as to WHAT theyre actually doing besides my theory, simply stuffing as much debt sausage as possible into 401K's and pensions, then pull the rug out?
I cant figure any other possible endgame they have, unless its just Mr Bernanky 'What's this "housing bubble' you speak of' actually being this stupid, having no other idea what to do simply and kicking the can a few feet ahead till tomorrow where they can live to print and pump another day.
WTF
When the sell button is finally pushed, it won't be announced.
This is a beautiful chart. If we look at 2009, the more money was pulled out
of equity funds, the higher the market went. Just when we saw the first
inflows, the market turned south. And just when the crowd pulled money out
of equity funds again, the market soared. On the other hand, we had
the crowd jumping into bond funds, since the beginning of 2009, and since
then, bonds are falling.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=516647
It is important, that during the next 3 month (the expected distribution
phase), the crowd starts to be bullish and equity funds see heavy inflows
So I believe, we could be at the beginning of a distribution phase for equities
that will last until summer. During this period, I expect the S&P to break 1150
and fall to 1100 - 1120. The only ingredient for a first correction is the market
sentiment, that is to bearish for a strong pullback. On CNBC, the bullishness
is rising fast, so it will translate to the crowds mind in the coming weeks.
The liquidity rally was over in February. Since the first correction this year,
people are starting to buy the better than expected earnings and are chasing
dividends. This is the second leg we had now and it took us up here. This
last leg should be Wave 5. It looks like the market absolutely want's to know
what happens if we go above 11000 in the Dow.
Of course, there is a probability for 2010, that both asset classes will start
to fall. At a certain point, yields will be to high for equities to rise further.
Than could be the moment in time, when there is no place to hide. This is
when the real crisis starts.
Bernake is inflating the money supply through the stock market. He obviously can't inflate it through credit creation anymore. He has to inflate it to counter strong deflation pressures. If the US/world goes into a deflationary spiral, everything's toast.
Well, it appears that Bernanke is allowing the equity market to bubble as a poorly planned exercise to restore confidence in the economy. Of course, the MSM is doing their best to provide the assist. Actually, for now, it's going pretty well.
The problem with that is way too many investors-- even the retail ones-- are (correctly) suspecting massive manipulation, and refuse to throw their marbles into the ring. The other problem is that the only way to really get investors involved through this echo boom is through credit creation and expanding the money multiplier.
It ain't happening.
As we move forward, expect to see more of the same "cheerleading" spin on economic data. The continued manipulation of the spoo's will allow dredges like the Mortgage Insurers another round of equity issuance, but that door will soon close.
The real action will be in the bond pits-- and at the Treasury auctionhouse. If the Fed continues to monetize, it they will have their fingerprints all over the upcoming auctions. Where else is Timmy going to find his willing buyer?
Yep miker, but what gets me is who the hell is fooled by any of it? Its REALLY just a worldwide game of musical chairs? Its obvious to all that is whats going on, so today Bernanky is just like a little kid who covers his eyes and believes he's now invisible and no one else in the room can see him? Seems really thats all we've got, extend and pretend no one can see us, hell I dont know XD
Found a great cartoon - how does one post a picture again?
You can't unless you are a contributor. Place a link in your post. If you find pictures or charts in the comment section, the person posting them is a contributor or Tyler/Marla.
this kinda reminds me of large equipment auctions I attended with my well off friend, in that racket theres alot of arch enemies bidding, I watched him purposely runup a price on a package of equipment on this guy he disliked... the auction went to the moon , finally my buddy just stopped bidding...and walked away laughing.. the guy he was bidding against,(that desperately wanted the stuff a 120k bid worth only bout 60k) well it took few minutes to sink when he realized he'd just been bent over big time!! He paid almost nearly double of what the stuff was worth... but it was too late the gavel fell and he got royally screwed... it was actually funny to watch how much of a frenzy some folks get into when they try TOO HARD... and this my buddy did just to get even with him from a measley 5k deal that guy had shafted him on...gotta love those auctions , you really see how greed works... me thinks this too will end up the same way... time will tell
The market keeps going up and up by 10, 40 or 70 points each day under lack luster volume. The Pigs are using the skills to make the market look like it's doing good, when that is so far from the truth. Do you guys and gals get the feeling that one morning we will wake up and the one stud holding the whole floor of the market up would have broke and we will see terror in the economy and no one will know what to do. I almost get the feeling that some are trying to get their stuff sold and find the exits before it happens.
Oh, my pretties, the correction is coming. We'll wake up one morning and find it limit down. There will be panic, the lights will dim. The skies will darken with jumpers. The crash is coming...and it won't stop until we all the way down to 1140 or so. Update your living wills.
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