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Further Confirmation On The Irrelevance Of Stock Markets
Last week we pointed out that Jefferies group, one of the last few remaining non-BHC broker-dealers, has just experienced its single most disastrous drop in trading volumes, as its principal trading revenues plunged by 80% QoQ. This is merely confirmation of what we have been warning ever since we started highlighting the series of 20 consecutive outflows from domestic equity funds: banks will soon be forced to lay off thousands of people as the primary revenue driver for the bulk of Wall Street firms - stock volumes - is now gone. BofA and RBS have already confirmed they are letting people go. Next up: the electronic trading giants such as ITG, Knight and Schwab. And it will only get worse. As the FT reports, September trading volumes are already 8% below August's, which in turn was the lowest in 3 years! Of course, the Fed is fully confident that if the DJIA ends September at 11,000, investor confidence in stocks will return. We have one word for that - LOL.
From FT:
The continuing decrease in volume reported by the US’s largest electronic trading groups has triggered a fear among analysts that the fall in market activity might be more than a seasonal phenomenon.
Trading-focused groups such as ITG, Knight Capital and Charles Schwab enjoyed upbeat second quarters when the European debt crisis sparked extreme volatility. As fear has given way to unease with the global economy, however, trading volumes have fallen sharply.
“You’re starting to see some real pain,” said Christopher Allen, an analyst at Ticonderoga Securities. “September is not a material improvement over August. Aside from possibly the US election, I’m not sure what the catalyst is for trading.” A record-long streak of outflows from equity mutual funds – now 20 successive weeks beginning in May, according to the Investment Company Institute – and reluctance by even normally bold hedge fund managers to take big bets has suggested that there are more than seasonal factors at work.
Mr Allen’s figures, compiled last week, show that trades for the trading industry are down 8 per cent so far in September from August, when trading fell to a three-year low.
And what is funniest is that the decline in volume is blamed on the (lack of) intervention in the HFT's daily attempts to pickpocket slow money institutions.
Diego Perfumo, an analyst at Equity Research Desk, said that efforts by global regulators following the May “flash crash” were reducing volumes by high-speed firms, which was making it more difficult for other investors to trade.
“Higher trading scrutiny combined with tighter regulation is drying up the liquidity provided by high- frequency traders. Lower liquidity is symbiotically affecting volumes from traditional investors,” he said.
Oh really? Has anybody been affected by the "decline" in liquidity in SPY, Amazon or Apple? Last time we checked the only three products that trade had no problem with hitting bids (of course, front run several trillion times by $0.0001 bids just ahead of the submitted one to get the price high enough so that the last HFT bagholder can offload to you). Instead of lying, perhaps Diego and his firm, which incidentally makes money from the status quo and sees to lose millions should HFT scalping be impaired, as it seems the firm provides "Execution services from ITG, Credit Suisse, BNY and Instinet", but oddly enough the FT did not feel relevant to disclose this blatant conflict of interest, should look at the primary cause for volume collapse: that confidence in stock markets is gone, period. Nobody dares to hold stocks overnight, as nobody still has any clue why the market crashes 1,000 point in the span of a few seconds. If anyone hopes to revive faith in the stock market without someone getting punishment for the most ridiculous market crash since October 1987, they have another thing coming.
Wall Street may have gotten off scott free from the greatest absolute household wealth destruction episode in history, but when it comes to capital formation, pretty much everyone save for a few vacuum tubes, have had enough. And luckily, that means that worthless HFT, and other high volume parasite traders, will soon be out of a job. No tears will be shed as equilibrium reestablishes itself, and those providing absolutely no value to the stock market will become extinct. If the market will not self-correct, the market will be forced to self-correct.
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Ladies and Gentlemen,
To garner returns and boost volumes (someone gets paid for volumes?), the robots will set up another flash crash. Ramp it up, short into the ramp, and blow the whole thing to hell.....
WTF
The Flash crash was a FED thing, not HFT.
Audit the Fed (original Bernie Sanders bill) hits Senate floor for debate > Flash crash > compromise bill proffered that protects the Fed > Flash correction.
That simple.
Wall Street may have gotten off scott free from the greatest absolute household wealth destruction episode in history
It's all a part of our great push to "Save the American Yuppie" with the Fed as headquarters for charitable giving. The stock market has become a barometer for how much we're willing to spend in this endeavor through our now and future taxes. please give generously.
MODERN STOCK PICKING
http://williambanzai7.blogspot.com/2010/09/modern-stock-picking.html
The junks must be a mere reflection of your amazing work, wb7.
Tnx, don't worry the visually challenged don't bother me at all.
Using Google Analytics and my data base, I see that the posts with the highest views and positive comments also have the most junks. For example, the Banzai7 Periodic Table is the most popular image, but it also has the most junks.
This post seems to be the most popular one today, which is funny because I thought the banker survivalist post would take the lead.
JD SMITH
http://williambanzai7.blogspot.com/2010/09/jd-smith.html
They sold in May and went away...
It's not just HFT it's the precarious state of the economy in general and the belief/reality that that will dictate everything. Managers have assessed the landscape and placed their bets. And they're sticking with them. How those bets turn out depend on how macro themes play out - which mostly boils down whether or not there is any kind economic recovery coming down the pike despite Obama's best efforts to throw a wet towel over everything.
There doesn't seem to be any money flowing really either. Not a lot of manager searches, RFPs or big asset class allocation rebalancings (except maybe OUT of equities). That means no new money being put to work, not accounts being transitioned etc.
And all together that adds up to....no volume.
It's pretty much an all-beta world right now.
Mercury,
Three years ago, "everyone" I knew was in the markets, speculating one way or another. After the 2008 crash, that drove a lot of them out.
I think you are right about May's Flash Crash. That put a stake in the market. The number of people who I talk with who are buying stocks is fewer than the fingers on one of my hands...
Well that too but what I meant here is that there (seems to be) less institutional (professionally managed) velocity in the equities markets. Despite all the equity fund outflows there's still a lot of money under management (including money invested in funds by individuals) but managers have already bought what they feel comfortable with and they aren't trading in and out of names very much (as they wait out the economic fate of the country/world)...which means low volume. HFT for the most part is dependant on trading volume generated by others so that should be down too.
My neighbor bought apple and netflix. Last week at its high! This after i told him of ZH, silver etc. And i thought he was a more intelligent neighbor until now. Oh he says netflix is going into canada a friend told him. Even if they do go to canada, so what. We are all broke down. Am i the only one in my friggen community that gets it or am i the one dummy? I already know the answer, but damn , this is living in the twilight zone.
have a grand sunday you all. Rain in Oregon
Kinda like a scene from "A Bug's Life:" "No Henry, don't look at the light!"
Henry: "I can't help it! It's so beautiful! (Zap!)"
Another one bites the dust.
Human - ZH?
I'm not a Streeter, excuse me, my Dictonary offers me:
Give me a clue - should I be investing in the Canton of Zurich perhaps?
You know what they say - "volume leads price".
If anyone's interested in what Prechter is saying right now, we're at the completion of wave B with the conclusion of this brief leg up. Count it out and you'll see the implications......
* Quick Question. Does he have a time frame for whats next in the coming 5-6 months ?
Oxymoron; yes, the next 5 or 6 months.
knucles, you are a fucking genius, lol.......why didn't I think of that.
on the subject of waves, and it only my opinion and who gives shit about what i think, right, but i think technicals are out the window and have lost relevance at this stage of the intervention by the FEd and other central banks........no metric to measure against. no sense of the impact.....no fucking sense at all as to real price discovery ........
i remember the wild swings as the last crisis took hold and i may be wrong but i get the feeling the irrational price moves seen late last week may be a forerunner of what comes next.......it is a risk i am looking out for day to day for what that is worth.
ps........thx for your kind words.
Just remember, Prechter's Elliott Wave said the FED does not matter for more than a couple of days. "A day or so," is the print. Wow, they said that back in Feb when the FED pumped 700 points on the dow. This time it's 800 points as they say it's your last chance to get out at a 5 digit dow back in Feb. also. My question to Prechter, when are you relevant for more than a day or so? Why do you always come on at the market low's, sell your shit, and then cause all kinds of pain to your subscribers. Your analysis of technicals are flawed. Just like your forecasting service. Sell silver short at 15. Lot's of yoke on your face on that one too. CRB is making new lows, don't buy, sell short. Then another rally shoots down another failed forecast. Elliott Wave International is NO better than Cramer. At least Cramer is free. Full Disclosure, I stopped listening to both idiots.
I don't listen to his advice on precious metals. The undercurrent that he doesn't seem to consider is that oil exporting countries have been accumulating gold for years because they realized early on that they couldn't redeem dollars for anything approaching the value of their exports. China has taken a hint and has recently started following the same act (legalizing gold ownership of the populace, CB starting its own buy program, etc)
It depends on if you're placing your retirement funds where you will be able to use them, or are a trader who wants to kick these HFT's in the nuts. If you're the former, cash and cash equivalents has been his line for a couple years. If you're a trader, it was stocks in March 2009, then cash in Feb. 2010. I think he also sounded the alarm to his subscribers in April that the top was in.
The expected time frame for this next move is "soon", as far as I can gather..... the rally is getting very "mature"..... (look at the volume).
Better to get out early if you've got big $ to settle. Once it breaks the market will be very thin..
Thanks for the info.
...and if you excluded HFT the total would be < 1,000 shares per day total.
Can't skim from retail investors? Bummer.
Next thing they will be telling us is that bureaucrats can't keep sleeping at their desks, and with their co-workers, while the taxpayer continues to buy them donuts. Another bummer.
I don't know what the world is coming to when people will actually have to find honest work.
The decline in volumes will also make it much easier for the FED to prop up the stock market at "pshycologically important" range of 10K-11K. If nobody is trading, then there cant be a market crash and status quo will remain.
Well, yeah... that makes sense. But the lobby that was making all that money now isn't making nearly enough to support its lifestyle.
What I find incredulous is the fatally mistaken belief that a higher stock market unequivocally translates into higher conifdence upon the masses.
The returns are already in... consumer confidence is STILL in the crapper, retail investors are pulling money out EVERY WEEK, and probably most important-- the underlying market strucuture is eroding. The next thing to lose confidence in? Why NOT the U.S. dollar?
Perhaps, Charlie and Warren will just have to "suck it in" when all this crap starts to unravel.
In the meantime... I'm staying out until I find hard evidence that the underlying market structure is being restored. That means minimal government/Fed intervention, an severe limits on HFT volumes, and asset revaluations (if necessary) to reflect the fundamentals of the assets I'm purchasing.
What these jokers are doing right now should fool nobody. And I think that's precisely the conclusion that those in power cannot come to accept. The further they go down this road, the more confidence will be lost.
And they WILL go further down this road, I guarantee that.
"What I find incredulous is the fatally mistaken belief that a higher stock market unequivocally translates into higher conifdence upon the masses."
Indeed. Like any good lie, it is just a slightly perverted version of the truth. In this case, the truth is that confidence in the masses (social mood) leads to higher prices.
3,000 and more dead to bury lies was not adequate. Too many of us know there are murderers in our government. They cannot allow 911 or this travesty of a market to be exposed, so how many more must die before we lock them up? Will the next war be their cover?
I am not used to being so pessimistic.
hey merehuman, widen your lens, refocus. . .
remember your garden, and all the foods you grew from your own work. . .time to plow under and prepare for compost, enrichment, for spring planting. . . cycles within cycles, no thing ends, just awaits the next bloom.
and I know you know, as I've read your posts for months. . . the pessimism is cyclical too, as is today's rainy weather - yesterday was sunny and warm, no?
know there are people that hold you in their thoughts. truth! get out those guitars and wait for the temporary clouds to pass. . .
take it easy. . .
IMO, a lot of people have a very distorted, 19th century view of how 'the markets' work. They really think people bring their wheat, pigs, oil to a place in New York and a few men stand around and work out a price for those goods - and that's their entire view of 'the market'. As long as 'trades' are being made, then the world is still spinning.
Let's face it too. The more you know about what's going on, the less sleep you are probably getting.
The entire financial industry is one gigantic mal-investment.
So true. Look how far it's gone from it's original purpose of capital formation, hedging, etc. It's become self-referential. I saw a politician on one of the Sunday shows a couple weeks ago talk about how good the financial industry was for the economy, jobs, etc. I don't think he really understood what he was talking about (no surprise there).
It was interesting on NBC news Friday night, the lead story was the dissatisfaction Americans felt about the economy, and there was a subtle dig at how Main Street viewed Wall Street as being completely disconnected (and still very successful, unlike the rest of the country).
Further Confirmation On The Irrelevance Of The United States
(Reuters) - Treasury Secretary Timothy Geithner faces a lonely campaign to make China's currency a major issue at the next Group of 20 summit as would-be allies shrink from confronting Beijing.
http://www.reuters.com/article/idUSTRE68P1F220100926
Entertainment Tonight...Featuring The USD
http://99ercharts.blogspot.com/2010/09/usd_3657.html
If HFT programs execute 1,000's or 10,000's trades a second and HFT accounts for 73% of US equity volume, with trading revenue down, wouldn't that indicate that there is an exodus from HFT?
Is there something I'm missing?
As there are less and less retail trades to font run - the algos volume drops as well. MY guess is that every 100 shares Joe six pack used to buy probably generated 10x that amount in HFT volume
So, now the consenus opinion seems to be forming that the market melts up in an orgy of liquidity.
I have been humbled too many times to think I understand the markets, but earnings season is right around the corner and I am very curious about the opinions of others regarding the effects of these coming reports.
Everything I see and feel tells me that business conditions have been deteriorating for the past few months. Reports from the past 2 quarters showed strong earnings comps. Can we expect those kind of reports again? Comps are getting harder to hit. What about guidance?
I understand liquidity bidding up prices while earnings are improving, or even flat, but what about when earnings are dropping? Help me out here, please.
Quite a few of us are on the short side. I think the consensus is that Bernanke is trying to create a melt up, but the suckers have left the table and no one is there to add momentum to the move.
I am with you on the short side, but it is getting scary...again. I would be retired now if it weren't for gubmint meddling. The Canadians killed my royalty trusts with their Halloween massacre a few years ago. The shorts worked great and got all my money back in '98 part of '99, but stayed short too long after the FED liquidity pump started. Past experience w/liquidity and being short has me spooked, but the economy has been ascending since mid '99, and the quarterly comps were easy to beat.
Now, the economy seems to be hitting a wall, the comps are getting tougher, the retail investor is out for practical purposes, we have had the flash crash, and here we are bumping up against all kinds of resistance points.....and along comes another liquidity promise. When earnings reports start in a few days, guidance simply has be be murky. I am a member of the ChangeWave Research Alliance. The lastes reports tell me consumer spending trends reversed last month, and this quarter's corporate sales-to-plan/red light-green spending plans have turned negative. New hires took a sharp plunge, as have capital budgets, and the order pipeline. Guidance cannot be good, but can QE overcome all of this?
The trend up appears to be somewhat weak and very mature. If you were a bankster, piling up the profits over generations of trades, how would you do it? Would you time the markets in a gamble or would you go to cash and buy up securities at pennies on the dollar after the volume comes back? How did JP Morgan do it? (Hint: we're not all as good as Jesse Livermore, and even he went broke in the end).
You could always do what Robotrader does: buy when the trend is positive and price is above 20 day EMA and sell when below, but if you're swinging a few hundred $k it might be more sensible to sell into the strength before it breaks.
You see the fundamentals, they're crap on the macro side. Earnings are a lagging indicator. Dividend yields are less than you could get in a savings account thirty years ago, precious metals are on a tear, the dollar is tanking....... how long do you think Bernanke is going to let his national currency burn before all confidence is lost? As soon as the suckers are on board, the trend reverses. We've got a lot of people on board already.....
so...
buy and hold is back. keep under the volume radar.
the invisible retail investor unseen by their prey. no target here.
step aside for the hft flash crashes...only to have the day saved
by white knight fed horsepower.
GOLDMAN JUNK!! Today would be a good time to start shorting those fuckers I think.
This is what we need. More conviction, and a lot less prediction.
The spike in trading volume this year coincided with a slide in the stock market.
This commentary seems to indicate that there will be a collapse in stock prices because of a lack of participation. However your commentary on QE2 states that stock prices will soar.
Which do you think it will be?
If the market will not self-correct, the market will be forced to self-correct.
Let's ask Mr. Ben if he is familiar with Heisenberg's uncertainty principle and Planck's constant
http://en.wikipedia.org/wiki/Uncertainty_principle
Good luck with that Bennie
It's because everybody went to Germany.
BEERFEST WEEKEND BITCHES!!!
http://gigapica.geenstijl.nl/2010/09/oktoberfest_2010.html
BEER ME!!!
WORD.
Was there for opening weekend, at the Lowenbrau tent. Dunno if theyre yours, but great pictures. Definitely better than mine which i took after 6L of the wonderful brew:)
HE! I was at the hofbrau festhalle and the schottenhamel!
Haha sweet. I have no idea where those are in relation to the whole site but i can only assume they were sloppy inside as well.
The local broads sure know how to drink though - would make a pussy out of any guy back home!
You should also learn our Belgium beers man!
18° alcohol levels for your pleasure!
Most german beers are a bit like water compared to our beers, but if you would compare it to American beers like Bud.... WHOEHAHAHAHAHA!
About a year ago I had some American friend comming over and they wanted to drink all the strong beers... DILIRIUM FOREVER!! :)
If you're not used to those, you'll lose 2000.000 braincells per bottle :)
Had some Duvel:)
(I prefer blonde)
i stayed home and smoked my homegrown.
When will the yardsale of Sparcs start at Madison Ave?
The time to start investing in stocks is when Joe Public is completely out of the market, with no clue what is going on, no interest, only disgust.
That time is now.
I think I'll wait for the full retard money to exit before I jump in, thanks.
There's no blood in the streets yet, Robo. If you're going either long or short at this point, you're gonna lose purchasing power.
LOL that was funny - time to buy is when the major magazines have front page articles explaining how everyone hates stocks and only morons invest in the stock market. That isn't ever going to happen at Dow 10k
Truly clueless Robo. You and most people are assumming what we are going thru is a normal market cycle. Wake the fuck up. Your comment is as annoying as "this is just like 1982". I laugh everytime i hear that line, almost everything is the reverse to conditions in 1982.
The credit bubble is over, we still have 3.5-4% GDP growth pegged in next year, we where getting that from 2002-2007 with the biggest creddit bubble in history.
Most people i know who have jobs are broke and living pay check to pay check. It's not like these people have dead end jobs, decent jobs but they are broke. With taxes, mortgage payments, living expenses, ect. they have nothing left after all their expenses.
Until we confront the structural problems we have, we will never have a recovery.
In my opionion, we are very close to a top, the day a well known Hedge Fund Manager goes on CNBC and says everything is going up, the FED will save us all, I am sorry, but that is the kiss of death.
Good luck Robo, never did i think you would be gulping the Kool Aid by the jugs, but oh well. Enjoy the Kool Aid.
ZIRP.
Bodes well for 1) stocks and 2) 'people you know' who live paycheck to paycheck. Can't they get an LOC at virtually 0%?
Great solution. Lets take out more debt to live on. LOL
You obviously don't get it
Its not my solution - just as you brought forth an anecdote, i bring forth the current solution to what most people are having to do to pickup that extra flatscreen at WMT.
You obviously fail to see the bigger issue here - life goes on.
Flat Screens are on sale big-time. Markdowns coming to a store near you. Seems like the consumer demand has tanked & the inventories are backing up for retailers. Heard it on CNN today.
Free at last, indeed.
When everyone's cry'n it's time to be buy'n. Right now stock gains are just a hedge against USD destruction... More cry'n yet to come when COL goes thru the roof IMHO...
Ya can you recommend me a stock that will get it's ass dilluted to smithereens by IPO's. Oh all of them. So I can't lose.
The prevailing mood among fund managers, who control vastly more money, is bullish. Hint - they're already fully invested. The public is no longer the largest player (look at the COT reports, funds are roughly the same size as banksters, on opposite sides of the trade, with nonreportables being tiny by comparison).
The public I know does not seem interested in the markets now. They're all in bonds. Who is going to be there to fuel the big move?
Too bad playing with all-but-involuntary, tax-deferred OPM leaves them without a genuine need for competency.
Or when the Fight Clubbers find the real deal bashing their heads in. Some banker types like wading into the crowd. Indeed "some were cheered after saving the City."
But, who will be your Bag Holder when you want to Sell? HFT Computers?
Volume? We dont need no stinking volume. Just keep those Google and appl shares going higher andI will love Bennyboy 4Ever. This J6P knows exactly whats going on. The Fed buys stocks. The Market goes up. Do you really need a chart for that? In the mean time, Chart groupies, Stock purists and naysers get bitch slapped from the fed.. If Roubini is feeling upbeat, Then fuck it. Im in.
There are 52 big cap stocks paying a yield of over 4%
And 92 paying over 3%
http://www.dividend.com/dividend-stock-screener.php
Yet everyone hates stocks right now.
They would rather loan their money to Uncle Gorilla for 10-years and get a paltry 2.6%.
Really I thought valuations were a tad better when the Dow was sub 7k
Once agian another stupid comment. "Everyone hates stocks"
Who? have you checked the sentiment readings.
That's another stupid line i hear all the time, "that stock is paying 4%, you gotta buy"
But what is lost in this stupid comment is, hey, you might only get 2.6%, but you get your money back. Try 4% instead, and hey, you might lost 25-50%.
Keep drinking the Kool Aid Robo. LOL
They are either incredibly dumb, or are concerned about the potential for loss of principal.......
Elmer fudd public is not a trader, nor should he be if he's buying dividend stocks. You're a bull, we're bears, it's OK to be different. But being a true contrarian is being bullish when 98% of the hands are bearish. That was in March 2009. We're not at 2% bulls in October 2010......
"Uncle Salami" there sexy. And those ain't no loans, either! These idiots are giving him real money! And to think some look at government as God. They're humans just like the rest of us. The most messed up in our history but hey, it's what humans do, no? Err.
Robopenis !
I don't share RobotTrader's view on gold but now is as good a time as any to buy stocks.
Where'd the 'money' go? Gov & quasi-gov bonds!? How the fuck are these any better than stocks? Does anybody reading ZH have any respect for the credit of the government?
Wake up.
Hey Robo, riddle me this:
If XYZ stock is $100, and has a $1 dividend payable, where does the stock open on the x-dividend date? $99. So you now have a $99 stock and $1 in cash. $100. So, are you really better off? No. And don't forget taxes are paid on the dividend.
That rube about how x% of performance of stocks is based upon dividends? Folklore. The growth of the stock market has been due to the growth of the economy, and inflation. Some portion of that has been 'attributed' to dividends.
So, if the economy doesn't grow, and earnings don't grow, the stock price of a dividend paying company will decline over time, all other things being equal. A dividend payment is NOT like a bond coupon payment. [Not that I am recommending bonds, which are the mother of all bubbles.]
Maybe at least some portion of market participants understand some basic finance principles...
Good luck with that bullishness...
MONDAY MORNING AT ACME HFT
http://williambanzai7.blogspot.com/2010/09/monday-morning-at-acme-hft.html
BEHAVIOURAL FINANCE 2010
http://williambanzai7.blogspot.com/2010/09/behavioural-finance-2010.html
OK so we can fire the humans a let the bots run the banks.
Could they make any worse decisions?
+1 Nice avatar
The really sad part is that there's less and less market psychology to trade against. Raise your hand if one of your most consistent trading strategies stopped working last year and hasn't given a good signal in a while?
My hand is up.
this is a test, I'm sure I will fail
Shazam, I'm glad I took some profits on NITE.....but still holding some.
Sell side are snot nosed pirates anyway, their day is coming.
Dark pools bitchez, who needs a trading desk, when you can get transactions at real market value without some bitch front running you.
some honorable men in that so called "cesspool" aren't there. Time for men of honor then?
Higher equity prices are a central tenant of current FED policy BUY EM
This is the "New Normal"
making the Monster dance is some real vodoo science. That's why God gave us Mel Brooks! Maybe it's just funny, that's all. Now why won't Erin Burnett call me. Doesn't she know she's the hottest girl on earth?
You need to get out more! Google "Danni Ashe", or "Karina Hart" and get ready for a re-definition of hot!
great article TD, thanks for writing and posting it.
Here's an observation: when volume is light the market (under "normal" circumstances) will continue in the direction of the move at the moment. Turns happen on heavy volume which would either be a distribution or an accumulation. As a floor trader back in the early '80's, this is what I saw. If one wanted to manipulate prices (and I know it was done in coordination with others), it was easy when volume was light. Real easy. Fast forward now and you can see how it really works. That part is the same. Same program...different time.
Back in '82 when the Dow bottomed at around 770 I'ish, Lou and the boys at Wall Street Week said that stocks were a bad investment. I "knew" the bottom was in with high probability. Why? 30 year bonds were at 55 (14%)which I traded the most, prime around 20% as I recall, restaurants giving meals 2 for 1 ...everything seem to look like crap. Back then there was no debt bubble...homes were cheap (my opinion), gold and silver not good being in a major down trend. The situation, overall, was not the same as now. Further, keep in mind that the yuppies were just getting on board and starting to have kids in a big way. This demographic shift was important and I knew it. They could be exploited with ease. One common element of yuppies (in general and I am in that age group, by the way) is that they have a poor sense of value. At bankruptcy auctions, for example, they would pay more for items than you could get at retail....not too bright! In addition, they liked to brag about how much they paid for stuff...in other words, without realizing it, the bragged how stupid they were for paying what they did (people from the River North Loop area of Chicago). This attitude amongst this group could only mean they'd be bragging about how much they paid for cars, homes and so on. They did. Personally, I could see they could be screwed very easily...fast forward to now and we can see it happening. They are a huge demographic which will impact this economy big time. All hitting retirement age, down-sizing their over priced homes (if they can sell, of course), smaller incomes and large debt (I know too many whom have 6 figure debts and they are 60 and older...is this smart?). Back in the '90's I posed a question to many...the question was "could you come up with $5000 in 24 hours and you could even use your credit card(s)? Not one could...amazing. But ohhhh, they had their big overpriced homes, boats, beemers and so on. I know of one who payed around $700 per square foot for a standard 1200 square foot town home. Brilliant. As of now...not so brilliant. They looked and bragged "rich"...but they were financially doomed.
This sort of group, back in '82 were just emerging. Inadvertently, their egos have finished them off now. With even the low interest rates...there is no launch in the economy. Geez, back in the 70's, rates were 9% and you had to have 20% down on a home...and they checked your income (based on one earner). When's the last time that has happened? All I can say is things are different now compared to '82. The fundamentals (long term) are bad, but it is a manipulated market...so it doesn't matter. The best one can do is trade short term (I'm a day trader and have been for a long time). 30 years ago I would hold things for months, even years, including commodities like precious metals, grains, etc. Not now...not a chance. It is different now...real different. As long as it moves, we follow it. No sense picking tops and bottoms...when you can still profit from the intraday moves. Proper money management is the key.
Besides, it's all just a game...and it's rigged. I don't care what the top is or the bottom. My advice is to not try to figure that out. Only "they" know and I don't. If the train goes west, I'm going west.. the flow is the flow.
That's why people are leaving the market. People naturally don't want to be invested in a rigged market. At a crooked poker game, if you don't know who the sucker is, then YOU are the sucker.
"Rich" Asia is very much the same just 10-20 years out of phase.
I was perusing the household balance sheet in the Fed's Flow of Funds data the other day, and was feeling impressed by the seeming resilience of the US retail investor. It told me that as of the end of June, the "household sector" was still directly holding $6.8 trillion of equities, aside from the $8.1 trillion they held via pension funds, mutual funds, life insurance, etc, out of a total $18.6 trillion of US equities outstanding.
If households were holding $6.8 trillion of equities directly, that would mean the average American adult would be directly holding $29k worth of stocks, not including any indirect holdings. You might have seen articles commenting on these seemingly impressive numbers.
But, notice a footnote to the Flow of Funds first household sector table, table F.100: "Sector includes ... domestic hedge funds."
And in the comments on F.100 in the Fed's online guide to Flow of Funds data: "For most categories of financial assets and liabilities, the values for the household sector are calculated as residuals. That is, amounts held or owed by the other sectors are subtracted from known totals, and the remainders are assumed to be the amounts held or owed by the household sector.
http://keynesianfailure.wordpress.com/2010/09/24/why-this-time-qe-really-will-spur-inflation/
all is well:
http://www.ft.com/cms/s/0/bccb89c6-c995-11df-b3d6-00144feab49a.html
The US government is in danger of missing its deadline of divesting all of its Citigroup shares by the year-end after a fall in stock market trading volumes prompted authorities to slow down sales in July and August. The lull could prompt the US Treasury, which has a stake of about 17 per cent in Citi, to consider a share offering instead of selling the stock in small quantities in the market...
"If anyone hopes to revive faith in the stock market without someone getting punishment for the most ridiculous market crash..."
If anyone thinks that punishing traders is going to restore faith in the market (and bring back retail investors to bid up prices even higher)...
I'd buy a 100 share block of C to watch hank paulson burned at the stake. lol
+1
2x +1
Why so many junks to Robot? He's one of the few worth a darn around here.
Why so many junks to Robot? He's one of the few worth a darn around here.
second your double post, sir.
http://www.reuters.com/article/businessNews/idUSTRE68P27W20100926
The US financial system is shattered, as are many of its people, while genuine business investment is miserable.That's kind of clear.
Yet there's this endless stream of market pumpers and irrational positivists, and just plain lie and deny spruikers popping up to claim that all is well, and things are in the process of improving, and the 'Great Recession' is in the past. I bet you've all noticed this gunk intensifying in mainstream media. The same thing is occurring in Australia for example, a certain 'expert' Mr Rod North the Executive Director of "Bourse Communications", pedaled a whole spiel of propagandist drivel on the ABC News-24 channel last Friday, about how the US economy is getting so much better now, ( http://www.boursecommunications.com.au/ ) given this is purely a financial-pump PR company are we believe there was no client this time?) but provided no evidence to substantiate or verify any of it, and the interviewer simply doesn't offer actual counterpoints anymore, or offer someone who would, you know, 'balance' things. They used to, and not very long ago, but now they generally don't even bother to offer contrary views to what are obvious organized attempts to deceive en-masse.
I've noticed its even worse in the US where guests can routinely lie, oh so obviously and brazenly, and the reporter does nothing! Not a blink, raised eyebrow, or a smirk let alone any contradiction backed by irrefutable contrary evidence. Oh, no, you must be very polite and agreeable to your guest liar, especially if he or she is in Govt or business.
I'm not a religious man, not for 30 years anyway, but I know lying was called a 'Sin' for good reason. Lying works against everything and it leads to what was called 'Evil'. It's not complicated, Evil is a real behavioral practice but knows to hide its presence, because it is totally unacceptable, until there is enough of it occurring to take over everything. Whether you're religious or secular or other, this is true, and it's unacceptable that this destructive violation called lying, that enables Evil, is limply ignored by spineless sophisticates holding positions of trust. Evil action flourishes when ordinary people ignore it even as they see the signs in plain sight. We'll all pay a high price for doing nothing to kick the hell out of it, before it casts its wretched shadow on everything always. Some would say its already too late, but its like managing the lawn, you have to keep it trimmed, or you end up to your neck in it.
I just wonder what else "Borse Communications" do when they are not 'communicating' lies, denials and mass deception? And yet another curious sounding group named "Homeland Security Asia/Pacific - Security Intelligence Solutions" (http://www.homelandsecurityasiapacific.com/management.html) popped-up from nowhere this week. Is this yet another arm of the orchestrated global perception manipulation team? I wonder who's 'Homeland' this refers to because we don't have a Dept of Homeland Security and I sincerely hope we never do, because the US example sure didn't make the US any more 'secure' than it was prior to it's advent. Indeed, all real-world indications show it to be considerably less secure since. If this circus is going on so persistently and blatantly in Australia, it'll be global. This is an organized well-financed and rapidly growing global propaganda network, aimed at regaining confidence in the US. But US problems are not merely psychological, it's unrepayable debt slavery, lost jobs, and banks that got bailouts over people, and it all has failed to generate real growth or recovery. And it did not mow-the-lawn, it just fertilized and watered the Evil to greater excesses.
It seems the persons who are orchestrating this hopey-drone nonsense mistook a 'Depression' to be a psychological malady. 'They' act like it can be resolved via persistent application of the correct mix of lies and denials over time. If only that were 'true' we could just lie and deny our way out of anything. And your President is what? A professional practitioner of the LAW? A professional Elder LAW overseer?
Fucking BULLSHIT!
These are precisely the same lie & deny social tune-up tools used by the political class in 1930-31 and it failed completely to return the earlier 'confidence-mania' (despite failed rallies) or to abate the psychology of too much debt and no means to repay, within a sea of corruption. In fact it ended up becoming much worse than a mere failure, because when all the promises and denials were revealed to be baseless deliberate nonsense and deception, it led to a much more damaging cynicism, anger and distrust of Govt, and its agencies, and agents. Especially within the shattered middle-class, who blamed it on the Govt (despite personal choices). The credibility of politicians and economists were in ruins, and that persistently undermined whatever the Govt said for the next decade. In other words the lie and deny campaign made the psychological outcome much worse than it would have been otherwise, and degenerated into reactive mass discontent and aggression against authority figures.
It was precisely this increasingly coercive propagandizing in 1930s and 1940s, that prompted George Orwell to paint his bleak picture of a future 'Nineteen eighty-four', in which Big-Brother was watching and listening to everyone, or at least COULD be, you never knew when it was occurring, so you had to self-censor, repress mind, emotion and outward signs, and play-along and reflect the accepted variable truth, perfectly, or else disappear into the bowels of the fortified windowless "Ministry of Truth", never to be seen or heard from again.
Life imitates art, and we're seeing the same insidious state information operations spreading as in these earlier generations which inspired that lucid vision of our times. Only it's much more inconspicuous, mundane and crafty, and can be so easily mobilized in the 'effects-based' war of perceptions, without respect to actuality. That process implicitly will lead to unforeseen disasters. You can not lie and mass manipulate people and ignore actuality, and not get devastating blowbacks. The Evil has not yet grown sufficiently to take over everything, but it surely will if honest people don't kick the living shit out of these shameless liars.
You are the real landlord, demand this fucking lawn be mowed.
In 2010 a Global Propaganda octopus and its phony propagators are making the same exceptionally counterproductive mistakes in attempting to shape perception and action, and it is not aimed at the broad best interests. The age of mass advertising, who's whole aim and purpose is to shape and deliberately confuse and misdirect our minds, then lever or wallets, and sacrifice our freedom, has generated this system of smooth lying that first anesthetizes you before plunging a knife in unnoticed. You may not feel the damage of the liars at first, but that does not mean you have not been gutted and killed by them already.
The truth may hurt, pain is weakness leaving, but its not as damaging as endless lies and deception to mask growing Evil, that will surely deliberately frustrate attempts to actually resolve the real issues, so that it can take over everything. We are in a genuine struggle of Good verses Evil - both are real - and cutting the lawn this time may be nuclear.
The Evil would love that, it would with out a doubt take full control at that point, as the 'winner', and the dark vision loop of Orwell would be closed.
Lies are what lets the world go round and round element.
For example:
Did you wanted to hear when you where 15 years old that you where born because your mom was totally drunk and your father took her doggy style 5 times in a row?
don't think so....
it was the stork that brought you... right?
Nobody want's to hear the truth! WHO DOES?!
Wow, did that really happen to you? I guess I see your point. Truth=bad
.
Chart: DX
Houston? Er...Washington? We have a problem. The Dollar has achieved liftoff.
http://99ercharts.blogspot.com/2010/09/dx_27.html
No BRIC can keep this puppy down.
Update: http://99ercharts.blogspot.com/2010/09/dx_3673.html
Human - ZH?
I'm not a Streeter, excuse me, my Dictonary offers me:
Give me a clue - should I be investing in the Canton of Zurich perhaps?
Oh no - I get it! I should be investing in the new Zero Hedge ordinary shares offering - the official Tyler Durden Retirement Fund.
Wall Street may have gotten off scott free from the greatest absolute household wealth destruction episode in history
It's all a part of our great push to "Save the American Yuppie" with the Fed as headquarters for charitable giving. The stock market has become a barometer for how much we're willing to spend in this endeavor through our now and future taxes. please give generously.
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