Visualizing US Capital Outflows

Tyler Durden's picture

For months now we have been 'told' that the US is the cleanest dirty shirt, that the US has decoupled, that US markets are the deepest and therefore will inevitably be the sinkhole of global liquidity; but things appear to be shifting - quite rapidly. This week has seen Europe's VIX (16.6%) drop below US VIX (16.8%) for the first time this year and Europe's Euro Stoxx 50 (Dow equivalent) is dramatically outperforming the US Dow (+13.5% vs +7.75% YTD). What is most dramatic, and highlighted by today's gap-like behavior in EURUSD, is the total dislocation between EUR and US equities. Are we seeing a wholesale capital outflow beginning as US' Fiscal Cliff fears trump any year-end shenanigans potentially coming from Europe (post-Summit)? One thing is for sure, certain media individuals will have to change their tune now Europe is the year's winner and the US becomes the center of the world's event risk focus.

Stocks (upper pane) and volatility (lower pane) are winning in Europe...

 

and this week has seen the repatriation of capital quite clearly from US to Europe...

 

and incase you were wondering from where and to where those funds were flowing... AAPL is about to lose its battle with European banks in terms of market cap...

 

Charts: Bloomberg