"Great Rotation", Over

Tyler Durden's picture

It would appear that the hopes and commissions of each and every talking head wealth manager and/or central banker has been dashed on the rocks of 'fiscal cliff' tax-hike front-running and a citizenry who remain far more cognizant of the unreality of the real world than the reality being preached by the market. There were some fund flows this week into equity funds (the lowest in six weeks) but, as Reuters notes, it was all into international funds as domestic funds saw outflows and domestic bond funds once again saw inflows. As Goldman Sachs' funds flow and positioning monitor shows - Rotation, Over.


Source: Goldman Sachs

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
knukles's picture

Never was Great Rotation.
Was another figment of the Big Lie Propaganda matrix, goose the stock market illusions of additional wealth, all's well, don't panic, back to work happy peasantry...

If it had been a "Great Rotation" it would still be fucking Rotating!
More "Death and Horseshit from Above"

MrX's picture

squiggly lines charts make me want to smoke legal colorado weed.

enjoy: http://vimeo.com/15056028

Cpl Hicks's picture

Come to Washington state and toke up with newly-elected guverner J. Inslee!

francis_sawyer's picture

Howz that GREAT ROTATION out of HNZ stock working out???


Rothschild's [Reuters] reporting on Goldman Sachs... Ain't it a dandy?

TruthInSunshine's picture

Any "great rotation" would kill The Bernank's precious balancing act of inflating & maintaining simultaneous, historically epic bubbles in both equity AND bond markets, and the end of that fine balancing act would immediately doom (rather than allow him to kick the can on it for a little while longer) his "Virtuous Circle" joke of a monetary policy that's actually exacerbating stress fractures in the foundation of the real economy.

As has been stated before, the metric Bernanke cares about is flow, not static volume of stock, and any great rotation out of bonds spells the complete loss of control of interest rates-- UNLESS BERNANKE IS PREPARED TO OPENLY BUY AT LEAST 3x to 4x THE AMOUNT OF TREASURY NOTES in the secondary markets that the Fed currently is buying.

Greenspan's recent appearance on cnBSc, in a semi-lucid stupor, proclaiming that "stock prices have reached what appears to be a permanently high plateau" was the swan song for the whole manipulated game, and oil prices are speaking to the end, as well.

If only I had faded each and every one of Greenspan's prognostications that he's ever made, without a single exception, with absolute fervor...

disabledvet's picture

My view is still an outlier. "That Chairman Bernanke has in fact created the greatest bubble of them all" is certainly not accepted wisdom. I'll never forget that National City print though http://en.wikipedia.org/wiki/National_City_Corp. glad i sold it at sixty...right at the high as it turned out...long before Alan Greenspan would blow it and the entire world financial system up. http://www.youtube.com/watch?v=ze3dRODgAiA

Venerability's picture

A few flies in the ointment:

*** German election heats up NOW, with only 6 months remaining. And Merkel depending on a decently strong Euro and stronger Eurozone. Her coalition will hit back hard against the Europe bashers, while the SPD, for its part, may well capitalize on the "Return Germany's Gold" scandal - which it may have precipitated.

*** Obama-ites must already be getting literally furious criticism of Japan from the automakers and every other manufacturing-exporting sector that competes with the Japanese.

This CANNOT be dismissed, since gains among the automakers have equated with job gains so closely in various key states.

*** Marc Chandler's interesting story today concisely summarizes the "tax-kiting" rhetoric coming out of the G-20 meeting and how it ties in with Repatriation of Profits, which BOTH US parties have endorsed.

This is most interesting, because it affects the "eyeball" companies more than other sectors. Many of us here, of course, would LOVE to see another kind of "Great Rotation" away from the ridiculously overvalued part of Tech towards the ridiculously undervalued Materials and Manufacturing sectors.

disabledvet's picture

"long Ohio." i like that. "Want some soup with that ketchup Goldman?" we'll see of course. "three revolutions coming to together simultaneously" in the form of natural gas, nano-tube "paper solar" and 3 d printing. these are POWERFULLY deflationary forces that when combined with "deficit pay downs, military downsizing, bond purchases "to infinity" and zero recovery" and i think you have the makings of a "sound industrial policy after all." all with a War as your backdrop! what could possibly go wrong here? http://www.youtube.com/watch?v=AHe07HT5NQA

dark pools of soros's picture

3D printing will let us all print trillion dollar coins!!

Or at least some casino chips

FreeMktFisherMN's picture

Exactly. This whole narrative about interest rates are going up 'as the economy is 'improving'' is total nonsense. ZIRP and the 'bull mkt' in treasuries is a prerequisite for the rest of the markets to go up, as people use homes--which are nominally up as interest rates artificially low means more artificial demand for homes means boosting prices-- as ATMs to extract 'equity' and other institutions feel 'safe' that there won't be an implosion. The bond bubble is epic. 

Bananamerican's picture

Speaking of Death and Horseshit...why does Goldman get so much chart time on ZH between posts bashing the fuck out of them (rightfully so) for mendacity, fraud and Satanic greed?
Are THEY believable?
Does no one else provide them?

Is it like riding on an English built train during the Indian Raj?

Orly's picture

Like it or not, they employ some of the best economists in the world, including Jan Hatzius.  The fact that we can get access to this information- to take or leave on our whim- is nothing short of fantastic.

Back in the day, say 2010, you would have had to pay through the nose for this stuff.  I applaud ZeroHedge for printing it every time they get it.  I, for one, greatly appreciate it.


max2205's picture

Watch.   Cats and dogs sleep together,  pope quits, asteroid impacts,  and......stocks and bonds will go up at the same time.   


The best trick to come from oBen BernankeHoudini

TruthInSunshine's picture

You forgot "there is no honor amongst thieves."

And that's one of the things I always count on when someone or some "thing" tells me there's anything remotely approximating a well constructed "put" that will stabilize anything built on a fraudulent foundation.

luckylogger's picture

I agree, I wish he would still give us the complete pdf, they are very useful.

dtwn's picture

Just because GS is an evil, criminal organization doesn't mean that SOME of their information and analyses can't be usefull.  To think otherwise would be intellectually lazy and perhaps doing oneself a disservice.  There are going to be INDIVIDUAL analysts within every larger organization that may provided good information even though the organization as a whole is viewed with contempt.  See also: guilt by association, red herring, ad hominem, hasty generalization, poisoning the well, fallacy of division.

Bananamerican's picture

i can dig it...

but this is Goldman...

To me it's a bit like, "didja know the Nazi's made great pizza ovens too?"

maybe so, but I'm still not sure I want one...

socalbeach's picture

Along those lines,

The Great Rotation

"Wall Street is engaged in a huge propaganda effort throughout the financial and related media with the aim of separating retail investors from their bonds and bond funds and moving their assets into stocks. The meme is that there is a “Great Rotation” out of bonds into stocks. Of course, this is pure nonsense because all bonds and stocks are owned by someone at all times. It is just a question of who. Now that the third great bubble is approaching its ultimate pop, Wall Street wants the retail investor to own stocks and hold the bag while the boyz take refuge in safer asset classes.

Shameless. Just search the internet for “Great Rotation” and see the mindless crap that is being spouted..."

RacerX's picture

yeah it's flowing alright

insanelysane's picture

Unfortunately for the MSM, the citizenry, at times, must shut off the tv and venture out into reality and buy fuel and groceries.

Yen Cross's picture

  Deeper>DEEPER>  Uncle Sam...   The small intestine needs some fisting!

MoneyThangs's picture

Now we just need the great rotation from Krugmans ass to mouth to revert for the shitstorm to end

They Tried to Steal My Gold's picture

TBT Puts! Santelli smies...

RationalPrepper's picture

Did that on Friday.  Small speculative position.  We'll see. 

stant's picture

"it has started" karl denninger

Yen Cross's picture

     I realize technical trading has been thrown out the window. I realize every ALGO in town want's> a bump.

 Can someone please tell me why VIX is @ historic lows, And ES, is "range bound"?

FreeMktFisherMN's picture

I truly believe the Fed gives money to the primary dealers at zero, then they do as they're told (as they're shareholders of the Fed) by selling the heck out of UVXY, VIX Futures, TZA, etc., and PMs whenever there is even a bit if 'momentum' to base it on. Like the 'beats' in NY manufacturing survey and initial claims; off those #s PMs got hammered. 

Yen Cross's picture

 Welcome to Z/H.   You stepped out of the matrix. 

disabledvet's picture

i disagree that the low vix means "market corrections are dead." the last time the vix spiked up to records (fall of 2011) was a GREAT buying opportunity. "in risk there is reward." now we have..."little to no risk." sorry but the financier in me says "if gold is getting hammered then the market is not the place to be." if prices DEFLATE then why would the bank extend credit "for financial/economic growth purposes"? the only TRUE measure of collateral itself is now falling in price. "where's your recovery PTB?" worse still "this is a story that has been told many times in American history" and while I do see a way Forward from here it's clearly about "leaving the bulk of the American people behind." I mean the goal is to get the American people to rally around SNAP cards? Unemployment benefits "forever"? We got a working class in this country...i fail to see how the left is speaking to them/us AT ALL. Certainly SPYING on us strangely enough. Make you wonder...or not wonder as the case may be..."who paid for those freedoms in the first place." http://www.youtube.com/watch?v=2CPC0cCagOE

Yen Cross's picture

 At first I wanted to give you a [Red Arrow].  Then I realized the rationality of your post.  Nice work  disabledvet

Orly's picture

Kevin Henry's job at the NYFed is to squelch volatility.  That's it.  He uses whatever tools are necessary to accomplish that end.

Why?  Because the algos will only come out to swim in calm waters.  The calmer the market, the lower the VIX, the more the robots buy, ramping stocks ever higher.

It's pretty ingenious, actually.  All he has to do is keep a balance between puts and calls.  Out-of-the-money puts you can get cheap and you can make your money back on-in-the money calls.

I am sure it is more complicated than that but the idea is pretty simple.


FreeMktFisherMN's picture

 I've been on ZH for awhile, actually, Yen. I'm only 21 and relatively it wasn't that long ago that I woke up to how much a farce this whole mainstream economics paradigm is, and naturally I found Mises.org and ZH as refuges.



FreeMktFisherMN's picture

I want to go Galt as much as possible. At my school the 'prestigious' internships and job offers are at the big time investment banks, but I want no more part of being a useful fool at a TBTF institution. That's why I'm going into prop trading. Found a small prop shop here in NW Chicago and have been doing well, meeting targets. Trading volatility in commodities on inventory reports, Bloomberg terminal announcements, and just momentum and technicals/candles for support/resistance in general. 

Already have a (relatively) large position in PMs-mostly Ag but some Au 1/10 ozt.'s, too. I like the competitiveness/strategizing of trading, but also like the long term convictions that can be had in wealth mgmt, and would like to eventually be a financial analyst 'from the school of ZH' telling people the most conservative play is PMs and risky investments are miners, and look for opportunities abroad in places like Hong Kong; markets where people don't expect/want a confiscated largesse like Americans do, and with people who save, invest, and produce. Those are where the opportunities are in the future. Americans are fine with mediocrity and giving up liberties for 'security' via warfare and welfare.


otto skorzeny's picture

good luck with all that-but you would lead a much more productive and happy life as a skilled tradesman or some type of mechanic/machinist(diesel is going to boom). that stuff you're doing now  may make you some fast but only $ leads to drug problems and broken marriages-I know alot of guys that bought  seats on CBOT and stuff like that after school and ALL of them lead shitty lives now.

FreeMktFisherMN's picture

Otto I hear you. (you're in Chicago area right)? I'm from MN and am very conservative independent fundamental Baptist who knows what is going on/ am 'awake' about zionism and all this stuff. I'm at the point in college career where I'll have to simply find what I'm good at for now and use my skills to make money, but ultimately would like to be entrepreneur/restaurants and invest in actual wealth-creating companies like manufacturing. Who knows? The Lord is whom I trust. I just know for fact I would not be at home at a TBTF zionist investment bank, even though my peers here at NU all in their view view that as 'having made it'. 


I'm thankful that I'm awake, and that though things are deteriorating faster and faster, the Lord has already defeated evil. I'm saved not by my own works but because of believing in Him alone,  as He paid the price at Calvary.

FreeMktFisherMN's picture

I definitely hear you on the 'leading aimless lives' part as some of these guys who prop trade are there from maybe 6a til 930, and then mope around. I want to be an entrepreneur ultimately, or Austrian school consultant or something in terms of investing advising. 

Bohm Squad's picture

Biblical Economics is also an interesting subject that dovetails with Austrian beliefs quite nicely...not for a career, but for study.

Orly's picture


Get a useful skill and use your knowlege to trade on your own time.  That way, if you have to work for a living, you will be fine.  Not working for The Man and keeping quotas would be where "going Galt" really is.  You'll be the millionaire next door by thirty.

Think about the freedom that offers you.  Try this mental exercise: tomorrow, imagine yourself set for life but no one knows what you're really worth.  Not even your mom.  Blue jeans and a flannel shirt.  Walk around your neighbourhood knowing full well that you could buy anything you see any time you want.

Will that make you unfriendly?  Make you a jerk; some big-shot?  I think the contrary.  You'll see that being happy in your own skin is the richest a person can get.  I think you'll find that the first thing that will pop into your mind is how you can help those people not as fortunate as yourself.

Please let me know how this exercise turns out for you.  Keep your blue-collar friends.  They're much more fun anyway.  No pretenses.  And no one has to know your secrets.


SheHunter's picture

..."Keep your blue-collar friends. They're much more fun anyway. No pretenses".... 

Orly I always enjoy reading your posts but I just discovered you also are hands-down cool. 

Yen Cross's picture

  When I was 21, I owned 3 car washes, and was a fool! Keep your head screwed on straight, and you might become a Senator.

Jena's picture

A Senator?  Way to discourage the kid, YC!

FreeMktFisherMN's picture

This past summer (I'm a junior right now) I actually made it up as I went along, did the ol' 'self-employed' be my own boss thing. Yard work services acquired via Craigslist and some friends who needed projects done. Consulted about and undertook landscaping. Learned a lot out of that. Nice to get paid in straight cash that eventually turned to ASEs and Maples. Sold N64 and video games that I found cheap on CL and sold on ebay then. 'arbitrage.' Pretty funny how I put this on my resumé to think how the investment banks that saw it would think of it, too. At the bottom on my resumé I now have under interests/activities, 'trading' as well as studying systemic risk from Austrian school perspective. Probably eliminates me right on the spot, just ilke when I had an interview at a big i-bank and said I follow ZH. 

Honestly was a lot of fun, though, this summer, and had time to study markets and see what triggers their movements/read ZH a lot, too, in down time (I was busy everyday though painting and at min. mowing a ton). I have a good knowhow of how mkts like PMs, crude, nat gas will move on different econ data and inventory reports, and with the leverage avl. at some of these prop shops who are wiling to let you trade their own capital, why not? And while I'd like to be an advisor and give my Austrian POV rather than the lemmings/salesman touting modern portfolio theory stocks/bonds (anything commissions), for now I gotta make a living and trading is as 'go galt' as it gets. Have already met PnL targets this prop shop guy was looking for me to do. Only get to trade 1 lots to start, though, but eventually he said 10+ contracts I can do if I prove myself. 

FreeMktFisherMN's picture

Here's the bottom part of resumé:



Interests/Activities Finance & Markets: Commodities, trading, & wealth management

? Assessing price movement triggers (e.g., fiscal & monetary policy, geopolitical risk, weather), anticipating future trends, & strategizing hedges & warranted risk-taking (primarily concentrating research in commodities)

? Analyzing investment demand factors (e.g., silver as inflation hedge [asset like gold] & industrial metal [correlation to copper]) & forecasting supply outlook (for silver, both?current mkt. price/ozt. & ?extraction costs for mining companies [which must undertake enormous capital investment, manage labor strife, & absorb inflationary effects on their energy costs] leaving lower margin?less supply)

? Financial Planning: Discerning long term wealth preservation & enhancement strategies for different portfolio scenarios (investors’ risk appetites) approached at from the Austrian school of economics perspective

? Studying economic distortions due to inflation, with the view that gold, having historically served as universal store of value & without counterparty risk, is the safe haven play for purchasing power preservation amidst global debasement of fiat currencies

? Analyzing economic fundamentals of world economies (e.g., whether based on savings & production or borrowing & consuming) and effects of government intervention, and assessing long-term economic viability & systemic risks

? Fishing at cabin & Canadian border, intramural and pick-up basketball, reading financial blogs, following MN pro sports teams

FreeMktFisherMN's picture

not formatted well at all from the PDF I had it on, but all that is what I put on there (in addition to usual CV bread and circus stuff). If an investment banking firm doesn't go along with the Austrian POV or won't give it light of day, then I ain't going there anyway, so might as well check right off bat. 

One of my interviews for a prop trading firm the guy asks if I got a $ million right now what would I do with it? First thing instantly came to my mind was ( and I said it) buy 300k of gold bullion. Had to explain ZH-style why, while also trying to get across that I do like taking on risk if it is warranted/I have good conviction behind a trade, but that in this case I wouldn't take chances given how phony this whole economy is.

Savyindallas's picture

Yeah  -don't put ZH or Austrian School on your resume  -you're better off saying you read Hustler designed a wifeswapper website  or you did time in San Quentin. Even those most of these morons wouldn't what what ZH or Austrian School is anyway. 

FreeMktFisherMN's picture

I'm prob not gonna change it. If there is some consulting firm that acknowledges the value of understanding systemic risk and malinvestmenr then Ill consider. Meantime I still can trade volatility just from having good grasp of how even fully retarded mkts perceive things. I'm not headed into the corporate cubicle culture. I don't have a lot of tech skills to get jobs elsewhere other than what I dis this summer yard work so gotta do something with markets for now. That s what I've studied and a lot of that is Zh. I'm thankful to know how this is all a phony propped by zirp economy and ultimately will collapse.

Yen Cross's picture

  It's al< ball bearings these days Jena. Honestl,y that was a misspell, and I apologize. (senator) IS THE CORRECT SPELLING...

Savyindallas's picture

Yeah sure  -a smart young honest kid getting to be a US Senator? You have to be a morally degenerate sex pervert -totally dishonest, with no soul- or have a soul you are willing to sell to Lucifer- and with plently of skeletons in the closet known to the big boys  -so they can keep you "honest". Every once in a while they let someone honest slip in - the big boys play these little games among themselves to see how long, and in what  manner they can corrupt an honest Congressman  - drugs, whores, little boys, bribes, hot stock tips, whatever. Once you take the bait, they hook you and own you. If you don't, they fund an opponent and beat you at the polls. If you keep winning, they frame you and drive you out with a trumped up scandal. If that doesn't work, they put you in jail like Jim Trafficante  -if that won't work  -they kill you. 

ebworthen's picture

You'd have to be a real sucker to get into equities at this point.

I know there is one born every minute but...