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Lipper Reports Biggest Equity Outflow Since 2002
Lipper FMI reports that investors pulled $5.3 billion from equity mutual fund during the past week, the largest outflow since March 2009. Including ETFs, the outflow was a massive $16.7 billion, the largest since 2002. And now, back to your regularly scheduled futures ramp, where courtesy of Ben Bernanke's bizarro supply-demand curve, selling begets higher stock prices.
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God, this is fucking confusing. From a contrarian standpoint, this news should be bullish as ever.
But I guess that's what happens when you have one guy control the wealth of the entire world.
With due respect - the entire world is wealth. What that guy has control of has nothing to do with it
Today I look for very light volume as the stock indexs float higher, thanks to the magic futures.
So your assertion is that if every nitwit still in the market sold everything, we could be at 36,000 today. Booooyaaaahhh, let the selling begin.
Yes, that's about how it should work except that 36,000 is probably a bit of an exageration. When the public mutual fund holder reacts violently to price movement and headline risk it is generally a good idea to to take the other side of the trade.
From a fundamental standpoint the equity markets have gotten some extremely positive valuation news. Worldwide bond rates ex. PIIGS have collapsed, equity prices have collapsed, and energy prices have collapsed. Anyone running some sort equity market valuation model based on econometric inputs has seen a vast positive change in value for equities. Unless we see forced liquidation stemming from PIIGS writedowns the path of least resistance for equity prices is up from here and maybe strongly so.
Inflow for April was 16.7billion, out flow for this week 16.7billion hum.
Very hard to argue with that. Super big outflows and the market continues to rise. They are playing a very dangerous game here. One mistake on the part of the central bozos and the markets could literally be ripped to shreds. The only question that remains is how long this can be kept up. How long can the charade last? What will be our tipping point?
Please. Bozo was a professional clown and to the best of my knowledge never a paid shill for the 13 Bankers.
This is upside down world?
So the way to make money is to be the second the last to sell by which time it will be near the moon and the Fed own the entire market.
Ben can create 16.7 Billion with the click of his mouse. Another click and JPM or GS has the money at their prop desks.
It is such a joke to hear about all the major banks perfect trading records. I call bullshit on all of it. There is no product with such a spread that these guys can all peddle to the rest of us without devouring the spread in the process by themselves. There is no way HFT is taking this money from other liquidity providers or daytraders. There is no shot they are making this in the currency markets without having losing days. It is not possible for 4-5 major banks to have this success at the same time via "TRADING".
The only possible explanation is that they are all exploiting a risk free trade with unlimited leverage. The same trade any idiot on the internet could make if they had access to the fed window. Borrow for nothing and lend out to the only entity that could possibly repay because of a printing press.
FREE MONEY!!
Doh!
Your right any nit wit can make money with free money. Banks buy with free money, then the NY Fed bids up the market thru Goldman. But there so bright.
Should be a "buy" signal. That and the fact that the major averages have gone pretty much nowhere for a decade.
On the other hand, I wonder if the withdrawl of money from the stock market isn't just an indication that people are just plain more poor? More in need of money?
+1, Give that man a cigar.
Adjusted for inflation, wages have been constant or negative. Households shifted to requiring two incomes over the last few decades. The middle class has been increasingly crushed.
Now, the boomers are retiring without enough money. People are pulling their retirement accounts to cover their premature "retirement" (due to layoffs), including mortgage payments, and then just food (screw the mortgage!)
Also, don't underestimate the money disappearing into precious metals -- that's *HUGELY* deflationary, because it drops the velocity of money when people park their cash in coins and bars in the back yard. Yes, those dollars spent to buy the metals did circulate ... until they retired with a debt repayment or default.
Deflation, and no, the middle class is not treading water very well.
Thank you for pointing us back to what should be obvious. It's so easy to get off into the weeds with these subjects. A return to the line of sanity and common sense is needed periodically, and you have provided that. For my part, I am contributing to the deceleration of money and retiring debt by accumulating precious metals (and some of the not so precious sorts like lead). Excuse me now -- gotta go water the tomatoes.
The backstage has accomplished what they set out to do. They have broken the financial backs of the useless eaters.
You a trader? Or an investor?
A short-term signal may allow you to jump in for a few hours, or a few days, and make a few bucks.
But if you are an investor, somebody who wants to do the "buy and hold quality stocks" thing, let me suggest that this market is a goner. The number one reason is because we are heading into the most massive, most spectacular, most crushing bear market in bonds in the history of the universe...one that will make the bear market in bonds in the seventies look puny by comparison.
We all know the reasons why. The government can't afford any of its promises, so government debt will be defaulted on the usual, time-honored way: grotesque levels of inflation that will pound savers--anybody stupid enough to have money in fixed-income longer than a year or two.
With rates rising--eventually, I know all the deflationary arguments, heard them a hundred times--the cost of capital for companies will increase, as will input costs as the dollar declines and money floods into commodities, shrinking corporate profit margins. Discretionary spending will be hammered. As rates rise, investors will move out of stocks and into short-term money markets as well (remember that money market funds for the retail client were invented by Merrill Lynch in order to accomodate demand for a defensive, liquid, high-yielding investment account--the CMA account was the result in the 70's.)
The stock market will die a slow, lingering death as earnings are asphixiated and inflation-adjusted returns stagnate.
The time to buy will be when somebody in the U.S. political class has the cojones to nominate a new Paul Volker (the original will probably not be available by the time this finally happens) to restore monetary discipline (assuming we still have a Fed, not an obvious conclusion) and a President who is willing to tell the truth to the American people and put the Congress up against it to enforce the rules.
This will be about the time that precious metals peak at whatever level they finally get to--$5,000, $10,000 per ounce?--and the smart money sells and moves into 30-year Treasuries at 18% for a long, comfortable ride.
Just one guy's opinion on sports. But if you think about it, if you did exactly this--out of stocks, in PMs from 1967 to 1980, then bought 30 year Treasuries in 1980 or so, you would STILL be clipping 12% coupons, or have sold the bonds for a massive capital gain at some point.