Why The End Of The 'Equity Cult' Means Trillions In Upcoming Outflows From Stocks

Tyler Durden's picture

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Steak's picture

I present for y'alls listening pleasure, another two playlists.  The first is a mix of new and recent EDM productions, many of which can melt faces.  The second is for all y'all who like to funk it up, with an EDM twist of course.

2cool (4skool) <ass-kicking>: http://www.youtube.com/view_play_list?p=12689F04C0CEEF6C 

up with the get down <funky fresh>: http://www.youtube.com/view_play_list?p=4217E3682ABFEFB9 

Steak's picture

Keep on pimpin, pimpin :)

kathy.chamberlin@gmail.com's picture

yeah funky electronic dance music, FEDm. new 2 me. you got it all, my man,

ya got it all.

rocker's picture

I needed that. Now for bottle of Bass Ale.  THX

kathy.chamberlin@gmail.com's picture

HAIL to my new M A E S T R O.

Sudden Debt's picture

Just got a call from the FED, Benny said he'll cover that. So no probs!



assumptionblindness's picture

I don't understand why the fuck your comment got junked...good weekend to you too!

Sudden Debt's picture

Mormons... what can I say... :)

ebworthen's picture

I'm in Utah, not Mormon, loved it.

Rock on.

Sisyphus's picture

You are an effin' riot. :>}

-1Delta's picture

OMFG im so full of Kool- Aid after today's data im not sure if I can go drink this weekend

rocker's picture

Finally someone mentioned the "Supply" factor and what it means.

I thinks you are rights. Bennys going to be addings to his supplys.

I abused the Ss and Benny is abusings our taxes moneys.

This has been going on for 6 years. How much stock can the FED buy?

Audit the Fed, nows.


TraderTimm's picture

Equities go higher - until they don't.

Damn right. Buying PUTS on the close this Friday, don't want to miss the downturn train!

(Even if I have to take 100 points or so of 'heat', it will be worth it.)

tunaman4u2's picture

The more Puts & Shorts we put on the more HFT can take from us... we're better off being OUT of the market & forcing them to feed on Longs instead. 

SheepDog-One's picture

I agree, let the FED crooks flop around there pumping to no one all by themselves. Make the FED the all-time record bagholder.

DosZap's picture

Bingo..............let them PLAY by themselves for a while.

Why feed the friggin leeches?.Let em' rot.

Sudden Debt's picture

The longer Benny waits, the more messy it'll get and at the end it will only cost more to "rebuild/buy" the economy.


I am more equal than others's picture

Scobby Do says "uh oh"

rle1221's picture

one question please. if all these funds are going to sell, whose left to buy?

SheepDog-One's picture

The FED already has what, $2.2 trillion worth of equities a junk real estate purchases? MIGHTY big bag the FED is holding there!

Mad Mad Woman's picture

Nobody.  Maybe the Fed. Nobody's going to be in a hurry to buy anything for a while.

zoomer's picture

I'm with you, Girl,  I like my trashy cash!

AccreditedEYE's picture

RLE: It's not a "one and done" the implications of this are long term and will play out so. With less capital flowing into the "equity" allocation in 401k and pensions, there is less firepower for the asset class to perform as most have been used to in the past. Multiples will contract and prices come down. Volatility will, despite today's performance, increase. In a nutshell, much less wind will be flowing into the sails of equity for a long time to come. Of course, the short answer is the Federal Reserve... LOL!!

midtowng's picture

Speaking of withdraws, has anyone else noticed this yet?


In Afghanistan, investors in Kabul Bank are counting on U.S. support to stem a run on the country’s largest bank.

“America could support Kabul Bank to the last penny,’’ Mahmood Karzai, the Afghan president’s brother and largest bank investor, said in a WSJ interview. “The full faith and credit of the U.S. government behind the Kabul Bank–what more could you want?”

Afghanistan, which is receiving billions in humanitarian and military assistance from both the U.S. and Europe, is arguably a ward of both those states. What’s a few more billion to back up a failing Afghan bank?

Another reason bolstering Kabul Bank’s argument for a bailout: Its executives seemed to have followed the western play book for ruining their bank.

As the WSJ points out, Kabul Bank is accused of giving “clandestine” loans to themselves and Afghan government insiders.”

centerline's picture

As the WSJ points out, Kabul Bank is accused of giving “clandestine” loans to themselves and Afghan government insiders.”


I guess we taught them well.

SWRichmond's picture

Wait, you mean that government is, by definition, corrupt? 

Who knew?

knukles's picture

Whadday want?  How's about some of that $8 billion of US money just disappeared.

Owhhhh.... I got another one!  Is this piece of shit bank audited by any credible outside entity?  Betcha answer is "FuckNo".  Just like the Fed, "FuckNo".  No Audit. 

So, let's all just sing along....

So where oh where did the money go,
Oh where oh where can it be? 
In the pocket of an Kazari man,
Or a representative from DC?

Ya' just can't make this shit up, ya' know? 
If there were to be answers instead of indignation and threats, then there'd be an audit, like are done in some real, honest countries.  Somewhere.

Time for a Thorazine and Ativan Enema with a sooting Jerry Springer tape. 
(Quite Sobs)

Translational Lift's picture

"Mahmood Karzai, the Afghan president’s brother and largest bank investor"

This Mother-Fer is the largest poppy grower, drug dealer, crook, crime syndicate in Afghanistan.  He probably has the bank's funds in a Swiss bank along with his other funds..........

kathy.chamberlin@gmail.com's picture

stoner dude. splendor in the grass.

Mad Mad Woman's picture

Wow.  Very interesting read.  Time for some changes.

SWRichmond's picture


The government's ability to pay off debt is directly related to growth in the tax base and therefore, of course, the underlying economy.  The "Cult of the Equity" must be seen for what it was: a cult of faith in the productive capacity of the economy, and a willingness to invest capital in actual productive economic activity.  That faith is the thing that has died, and will not be reborn due to demographic as well as other factors (regulatory malfeasance, tax policies, etc). 

The flight intoTreasuries might make the government's balance sheet possible, but only temporarily, as it also guarantees that productive economy activity will NOT occur in the future.  Government borrowing and spending is not productive, as the chart linked above shows.  Government borrowing is strictly for consumption.  Debt is only productive when some of it is directly invested in actual productive economic activity.  In my humble opinion, the marginal productivity of debt has gone negative as a direct consequence of the dominance of unproductive sovereign borrowing.  As such, the dominance of sovereign borrowing virtually guarantees the collapse of the revenues upon which sovereign debt repayment relies.  The federal government is eating its tail.

centerline's picture

As bonds go, so do stocks.  Nothing shows the monumental effort being put into propping up this zombie economy than the current decoupling.  Talk about pissing into the wind.

SheepDog-One's picture

Bonds are acting as if a huge meltdown in stocks has already been ongoing for the last few weeks! MONUMENTAL pumping going on to keep this equity bubble inflated! 'Just 1 more day' is their morning rallying cry I believe.

vote_libertarian_party's picture

Pull up a chart with TBT and SPY.  Bonds spiked in January 2009.  Stocks (you know, the retarded little brother) didn't hit bottom until 3 months later.


That timing could be repeating.

SheepDog-One's picture

BTW, whoever junked THIS post, well I hope you die of cancer of the anus! Youve got to be a REAL fuktard!

ElvisDog's picture

I'm a little slow this morning. Bonds up means money is flowing into bonds, which means less money is flowing into stocks. Can both bonds and stocks go up in price on a long-term basis?

camoes's picture

70's  "stocks are dead" = bull market

90's "internet stocks are hot" = bear market

00's "CDO's are hot, high return, safe investments" = Depression 2.0

Shittybank says stocks are dead = BUY BUY BUY BUY buy them all bitchez

functionform's picture

Yeah I'm kind of with you there... Equity outflows being mutual funds?  Isn't that the 'dumb money'? 

DosZap's picture

Not necessarily, it can be the 401k schmucks, that have ZERO choices.Worst part, is what's left for them, Bonds,and T Bills.

Out of the pan,into the fire.

SheepDog-One's picture

Dont let Leo in on the fact that equities are due for a huge crash, he'll get all uppity and put up some solar stock chart that gained 8 cents again.

RobotTrader's picture

Euro is making new highs for the move.

CRB Index still going up.

Financials are outperforming the last two days.

Yet, everyone is buying puts hand over fist.

Eventually the outflows from mutual funds will reverse.

Maybe after the S & P 500 is up 30% from these levels, people will start paying attention to stocks and forget about real estate.

For now, everyone is still shorting all rallies.

SheepDog-One's picture

Puts hand over fist, at year high? How do the pumpers get around that? Think I'll load a bunch too on Tues morning.

AccreditedEYE's picture

CRB Index still going up- To the non-elite, this acts as a tax, killing off consumption. (especially when wages stay flat/negative)

Financials are outperforming the last two days- Leaders of the last Bull are NEVER leaders of the next one.

Eventually the outflows from mutual funds will reverse- Don't count on it, at least not for the long term. Demographics are against you Robo. :)