The whole story about how private equity firms and hedge funds have steamrolled into the residential home market to become this decade’s slumlords is a story we covered long before mainstream media even knew it was happening. We first identified the trend in January of last year in one of my most popular posts of 2013: America Meet Your New Slumlord: Wall Street. Since then, we've done my best to cover the various twists and turns in this fascinating and disturbing saga. With all that in mind, let’s now take a look at the latest article from Bloomberg, which points out that Blackstone’s home purchases have plunged 70% from their peak last year. Perhaps they overestimated the rental cash flow potential of indebted youth living in their parents’ basements?
Stellar 10 Year Auction Stops 1.4 bps Through, Highest Bid To Cover, Lowest Dealer Award In One YearSubmitted by Tyler Durden on 03/12/2014 13:15 -0400
Moments ago the Treasury sold $21 billion in benchmark OTRs in the form of a 9-year-11-month reopening of Cusip B66, in a whopper of an auction that saw the high yield of 2.729% price 1.4 bps through the 2.743% When Issued. But more than just blistering demand at the pricing, all the internals were solid across the board: the Bid to Cover of 2.92x was well above the 2.54x from February, and the 2.68x TTM average. In fact, this was the highest BTC since March of last year. And in keeping with one year anniversary records, the Dealer Award was a paltry 29.1% which also was the lowest in a year. Indirects were 43.4%, down from 49.7% in February, which means that Direct soared, and sure enough they did, from 16.2% to 27.5%. Overall a stellar auction, and one confirming that the smart money continues to prefer allocation to fixed income, instead of believing the latest "growth stories" explaining away the second coming of the dot com bubble in Bernanke's centrally-planned farce of a market.
The "smart money" indicator is at its most extreme degree of selling since November, 2010.
Earlier today we were surprised when none other than uber central-planning skeptic, not to mention bond fund manager, Bill Gross threw in the towel and in his latest letter advocated the purchase of risk assets - and Bill Gross is the last person needing reminding that in a day and age when the 10 Year yields just barely over 2.5%, this means not bonds but stocks. The surprise, however, promptly disappeared when we realized that PIMCO is merely the latest entrant in the scramble for yield game following, with a substantial delay to all of its other "alternative" asset management peers, right into ground zero: European toxic debt.
You hear that old saw that "the market is not the economy," a lot these days, and for good reason. As ConvergEx's Nick Colas notes, the S&P 500 breaks to record highs - but U.S. labor markets remain sluggish; investor portfolios do well - but over 47 million Americans (more than 15% of the population) are still in U.S. food stamp program – the same as August 2012. The important question now is: "Is the market TOO different from the economy?"
The technicals break with the news!
A national average sounds an alarm: investors that drove up the housing market are bailing out
This is a headwind we shouldn't ignore.
Step aside long-time hedge fund hotel darlings Apple and AIG, and make room for...
Crisis was averted. Or was it just put off for another day?
In essence, you need to be selling strength.
Nearly six years after the financial crisis and its massive bailout, it looks like business as usual by the bankers in RBS and in the City of London and Wall Street ... The smart money is either continuing to accumulate physical or transporting already purchased bullion from storage in the U.S., Canada, Europe and other western countries to storage in Asia.
The "Mixed Signals" from 2 weeks ago, which morphed into last week's clues, must mean something this week as the markets had their worse day in 7 months on Friday.
Market tops occur when investor psychology changes. But it’s not a clean shift. Investors, like any category of people, are comprised of numerous groups or sub-sects: some get it sooner than others.
At these levels of bullish sentiment, fewer bulls isn't a contrarian signal but a sign that there are fewer investors willing to push the market higher.