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More On The "Money On The Sidelines" Lies
CNBC is well aware that if you repeat a lie long enough, it becomes true. The argument: "buy on the dips" as the gobs of sidelined money just can't wait to rush in and lose whatever, well, money it may have left. Alas, it does not work like that. This proverbial money on the sidelines, while it may care about seeing an SPY downtick compliments of a blown fuse at JPM ETF HQ, it is even more concerned about what may happen tomorrow, and whether the risk/return on throwing money into a market that as recently as a year ago showed how it can go down by 50% in a very short amount of time, justifies the risk of being unemployed tomorrow.
We present a comparison of cash currently in money market accounts (MMFA Index), which incidentally is now lower than it was before the Lehman bankruptcy: if anyone "on the sidelines" was spooked by that particular event, they are now over it, and U-6 unemployment. To say that this "capital" will further flow into equities which have already had an unprecedented and purely government backstopped 50% ride up, even as the general American public has no confidence it will have a job tomorrow, is misleading, flawed and representative of weapons grade stupidity.
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I was wondering why S&P is only down a single point
http://www.bloomberg.com/markets/ecalendar/index.html
Factory Orders
Consensus +1%
Acutal -0.8%
Prior +1.3%
USD is being pummeled
Note the interesting (and surprisingly rational) variation on flight to quality at the open: non-US debt.
Yeah... that's a very astute observation, jm.
Or somebody sold long bonds and bought gold. Wonder who that would be?
Either way, there was something unexpected about Treasury behavior in the face of a big SPY decline.
"big spy decline", yep.
While many economists believe that the U.S. has emerged from the worst recession since the 1930s, they worry the rebound could falter once the impact of government stimulus efforts, such as the Cash for Clunkers auto rebate program, wanes.
The overall economy likely grew at an annual rate of 3 percent or better in the July-September quarter, but that growth could slip significantly if consumers worried about further job layoffs don't keep spending. Weak spending would translate into more order cutbacks and prevent the manufacturing sector from mounting a recovery.
http://finance.yahoo.com/news/Factory-orders-fall-apf-1081832992.html?x=0
This just goes to show everyone that the green shoots were nothing but Government hand-outs. How many of these people quit making the payments after they recieved the goods?? And that question includes the 8k rebate for homes.
Jobless numbers are seen as a sign that things are getting better.
Bloomberg obviously thinks so, they were in spin mode this morning discussing Q1: 750k/mo job losses, Q2: 450k/mo job losses, Q3: 250k/mo job losses....see everthing is fine. (no mention that the consensus estimate was 170k
The rationalization I heard was that the bad job numbers indicate that the Fed is not going to tighten anytime soon so that is a positive for the market since there will be a continuous flood of liquidity for some time.... Circular logic be damned.
America is bifurcating, a new age of corporate fiefdom is emerging and you'll either be in or out, like China, Mexico, Brazil.....
"Outside the Gucci store in Shijiazhuang, a ... man delivers water to the mall on a three-wheeled motorcycle. On a good month, the work pays about 1,000 yuan."
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoA1uwHlysqU
Delivers water to a mall? WTF. Damn the stupid MSM.
TYLER: does ZH receives Charles Biderman's Trim Tabs work? It's pretty thorough and comprehensive with regard to "money flows."
Biderman has been featured on zh several times.
Green shoots sprouting on the screen...literally
amazing what a couple of trillion dollars of funny money can do to the equity markets on arguably one of the worst numbers morning in some time.
Can we f'ing drop so we can start a true recovery already?
the longer this stupid money printing rally goes on,
a) the higher late longs pay
b) the less money shorts have to hold up the market when it does drop
in hindsight, letting the market be the market all through 2008 would have been best for long-term. we would of dropped quicker and harder but we would have recovered with new players and a refreshed view that worst was really behind us.
holding up the market all along with gimmicks is just setting up a total utter disaster.
not one like 500 down mini-panic this entire year? that strains credibility.
Bye bye dollar - the politically most expedient way to create wealth with the least obvious consequences suffered by the brainwashed masses (only 10% or less have passports) is to keep devaluing the dollar.
Joe Six Pack and company will look at what little is left in 401k's and nominally it will be higher.
Thank goodness they don't understand the difference between nominal and real RETURNS.
If they did, the US would make Bosnia seem like a church picnic.
Cheers,
Pigpen
There was a futures floor trader trying to point this out on CNBS this morning and he was getting nowhere and finally run off the air by a commercial.
So all the money on the sidelines (a great image by the way, are they wearing helmets, sitting on the bench, or cheering every market tick?) decided that today's great economic data marked a great opportunity to invest in semiconducters? While selling the Dollar? So much for the greater fool. Investors are brilliant!
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
Joseph Goebbels
this is scary is hell...could have been said in closed doors by ben, timmy, rahm, pauylson etc
Dennis Gartman pointed out this morning in his newsletter that cash holdings by mutual funds had hit a 4 year low!
Someone should take the time and pull the statistics on the level/trend of deposits on the balance sheet of the major banks. I cannot imagine this looks any better than the cash holdings at MMMF's.
Conceptually speaking, why should I let my bank pay me 0% interest, when they are offering auto loans at 8%-- or turning me down on a 5.0% mortgage?
"Weapons grade stupidity" - Truly classic!
Vinz Klortho
So if the market goes up, and employment goes down, what does that tell you? The two are not related. The Fed prints up money and gives it to large banks. The large banks then go out and buy their stock, and the stock market. This can really go on for a very very long time. I thought people read Chris Martenson's blog.
two equity bubbles within one decade plus a crushed real estate market and these bozos think that all that money on the sidelines will find a way into the market
americans will gladly accept 1% versus putting money at risk in a distrusted stock market
they should be ashamed of themselves
Saving money in cash is for losers as purchasing power declines month after month. The only way to save is to buy stocks and commodities no matter at what price...
I'm debt free b/c of saving cash and today I only buy what I can afford. Loser...to some but most would trade places. Stocks you get: Bid/Ask frontrunning, exchange fee's,commissions, GS squid ink,cap gains and accountant fees.(oh and Prozac) Thats if everything goes well. I do realize that the power of the dollar can be locked in with debt. If I had a credit card I would max it out,take an equity loan and go to Brazil. Oih !!!
That's the logic that got us to $145/barrel for crude last year: index funds buying commodities ratably on the way up regardless of the price just so they could be fully invested in the market.
i lol´d so much i dont know where to start why this is so wrong
Between "weapons grade stupidity" and "delusionomics" this site is really getting some great new concepts off the ground!
Who wrote the book on indicators and who says its all carved in stone forever? Im still under the impression this is a new paradigm into unchartered waters so what if jobless is a LEADING indicator rather than a lagging this time? Some people sluff it off and quickly dismiss the "lagging" numbers. Who says its irrefutable truth? First the orders go and sales drop, then the labor force is let go, then the company goes under, then what , it all magically rebuilds itself in 8 months?
Ponder this:
You're playing tug-of-war and the other team lets go of the rope you fall down and lose. The "lagging" indicators let it go, leading the way to the downfall.
They're pushing the same nonsense in Canada. When one of the big banks' press release on the subject got reprinted pretty much verbatim in the main national newspaper, The Globe and Mail/Report on Business, hundreds of comments posted were all along the lines of: even if that WERE true, we sure as heck wouldn't trust our money with YOU.
http://www.theglobeandmail.com/globe-investor/personal-finance/families-...
I supose this money is being spent by the unemployed to pay bills. They have no interest in investing what they need to live on. So much for unemployment numbers being "backward looking." They are predicting future spending.
Money into the market is like heroin to a junky. The junky is now telling you to stop hoarding Vicodin.