The Great Rotation Is Over

Tyler Durden's picture

We're going to need another meme... the great pretense of the great rotation as 'investors' dump bonds and buy stocks with both hands and feet as they realize growth has reached escape velocity and its time to BTFATH... has failed. As the following chart from JPMorgan shows, the brief period of net flows to stocks over bonds has ended. If a rally like this can't get the animal spirits flowing in anyone but the C-Suite of your local share-buyback-ing corporation, when will it?



Source: JPMorgan

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Oracle 911's picture


But for what? For PM's?

ZerOhead's picture

"The Great Rotation is over... We're going to need another meme..."


The Fed is just putting the finishing touches on "The Great Floatation" plan ... where nothing ever goes down.

Kinda like the way my low-flush toilet works... 

garypaul's picture

Low-flush toilets are a total scamjob. How are you saving water when you have to flush 3 times? Not to mention the clogging etc.

knukles's picture

Not only that...
Many of the larger sewer systems were designed with a certain minimum gallon flush in mind.  Less water, lower the pressure and the sewage pipes plug up just like the commode.
So now numerous large cities have to get workers to go into the sewers, hose the stuff out with high pressure fire type hoses and often need to apply caustic chemicals as well.

"Another Shitty Unintended Consequence"

PiratePiggy's picture

Low flush toilet make some sense in the desert, but not in the rainy east coast or northwest.


What about battery powered cars? If they save energy compared to fossil fuel cars, why shouldn't I get an Obama subsidy to heat my home with batteries?

Kprime's picture

I absolutely believed that for years.  This past winter I finally replace a low flush toilet that was over 15 years old.  That dam toilet could barely flush pee.  I had to flush any "deposit" before adding any paper.  Even then the nearby plunger was almost a daily tool.  Fortunately it was the second toilet in the house and the one in the hall bathroom was pre-low flush. Thus it still worked.

We are in the country on a septic system.  This past year, due to health reasons my wife endured, we needed to find a tall boy toilet.  After a bit of research I found this 5 star rated toilet:   KOHLER Highline Classic Biscuit 1.28-GPF (4.85-LPF) 12-in Rough-In WaterSense Elongated 2-Piece Comfort Height Toilet.

This toilet is absolutely phenomenal.  I watch in awe every time I flush it.  After 30 years the engineers have finally perfected low flow.  There is nothing it won’t flush down completely on the first flush.  When it flushes you would swear it wasn’t using more than a couple cups of water.  It’s been installed about 3 months now.  I am still amazed.  It is one of the truly outstanding American made products I have seen in the past 40 years.

Farqued Up's picture

I'm hanging on to my mechanical heavy duty snake, plungers ain't worth a "shit" when super-turd is launched.

Chief Wonder Bread's picture

Do the algo bots know about this?

Emergency Ward's picture

I woke up late today.  Did I miss another great rotation?

Ben Ghazi's picture

It's just a big game of musical chairs.


All chairs are taken - music has stoped.

We're all fucked!

Wahooo's picture

Yep. And I think the US killed the #3 guy in al qaeda again while you were sleeping.

world_debt_slave's picture

need moar radiation mutations

JD59's picture



Buy the &uck ?????



Wahooo's picture

Buy The Kim Kardasian Wedding.

I Write Code's picture

Do not worry, big wheel keeps on turnin', rollin' on the ribber.  If big money wants bonds, Fed just rolls back QE a little faster.  It's not immediately rational, but caveat emptor. And with gold soaring up now, is that going to keep on too?  We're entering some very turbulent times, it seems, and my preanalysis says to go with equities ... and a little gold or gold-related stocks.  We shall see.

NoDecaf's picture

"la grande pivot du jour"

you can apply it to anything nowadays

GooseShtepping Moron's picture

A stock buy-back, in a sense, is a company paying off its debt. It would be a good thing to do if the company didn't have to lever up with fiat and slash capex to the bone in order to accomplish it. In other words, a stock buy-back that is realized on the basis of healthy, unforced profits without damaging future earnings potential is just about the wisest thing a company can do.

But this is not how things are under the current circumstances. Leveraged buy-backs are just the changing out of one creditor for another. The corporations have decided they would rather be in debt to the TBTF banks than to their shareholders. Although it makes sense in the near term, interest rates being as low as they are, the logic behind this position quickly evaporates as stocks decline and rates rise. It seems incredibly shortsighted to me. It is not easy to float additional shares in an overall bear market environment, and capex has been delayed far too long. In fine, just when corporations will need to raise capital again, they will be most unable to do so.

The whole thing is reminiscent of Saturn eating his children.

IANAE's picture

Stock buybacks are more like eliminating diverse ownership and consolidating voting rights and power... and distributing cash to activist shareholders-come-lately... and triggering moar ICP for company executives.


Yes incredibly short sighted unless there are sufficiently aggressive clawbacks (as for TBTF banks) in the ICP - but it is difficult to think of a convenient example of how a buyback, even supported by debt issuance, in lieu of capex could be characterized as imprudent or excessive risktaking ... until the stock tanks and shareholder lawsuits start flying, that is.


A bird in the hand...the next time things turn it may end up being a few years until record earnings/bonuses return.

andrewp111's picture

Corporate executives get free stock in the form of options, and their bonuses are often tied to the stock price. So, they have an incentive to borrow trillions in the Bond Market and use that cash to buy back stock in a rising market. They are just borrowing money and stuffing it in their own pockets through a roundabout mechanism.

Then when it all crashes down, the company goes CH11, the bondholders become the new stockholders, the old management sails off into retirement with all their loot, and the cycle begins anew.

viator's picture

How about Surge 2.0. Will that work?

ms8172's picture

What does BTFATH stand for?

GooseShtepping Moron's picture

"Buy the f--king all time high." It is the successor acronym to BTFD or "buy the f--king dips," because the new normal market doesn't really dip anymore.

Farqued Up's picture

Thanks for asking for both of us.

damicol's picture

I looked at the relatives levels of all the great rotations going back to 1950, i calculated  and weighted them all carefully,  did differential analysis and  checked and rechecked the numbers.

Still didn't make sense.

Added on and  then  weighted  them for addition of the fucking umpteen trillions of Ben wanker and obummer the Kenyan fuck monkeys contribution.

Ahh the numbers matched perfectly.

Now it is too obvious. There cannot be a great rotation from one to another, from stocks to bonds or bonds to stocks, anymore, not as you and I know  great rotations.

Because they are both at the all time high bubble to the sky limits.

At the same fucking time

Even switching one of the monkeys turds from one asset class to the other levitates it like fuck so it gets switched back again. and then it does the same, gallops off into fucking fairy never never land.

So I figured these desperate cretins will now start their great rotations every Monday morning soon and have it over by lunchtime and a great rotation back in the afternoon.

Rinse and repeat on Tuesday etc

Until some smart fucker decides its time to try something new.

Except those something new are already in a fucking bubble and that didn't work out too well did it Blackstone.

You can't sell a trillion $ of rotation into jerry built boxes that are overpriced and have a hope in hell of ever selling them to poverty stricken Mericans. Not without volunteering for utter and complete annihilation.

Even the Chinese wouldn't buy that shit.

Land,  well that's all been gobbled up and the good bits are also bubbleicious as fuck  and farmland in California is turning to desert. And half whats left is worth four fifths of the square root of fuck all and the rest is covered in fucking endangered naff wing albino beetles or some other fucking pest. And half the fucking army in jackboots  not to mention every libtard fucking environmentalist fruit cake will be digging a grave for you faster than you could stomp on one of the fucking pests if you accidentally did so.

Fuck!  what next.

How about Ukraine bond market, or maybe Syria, or how about Iraqi start ups in religious icons.

Fuck, what to do with these trillions

Well my guess is it now just a matter of time as the cycles speed up and rotations take on the whirring sounds of a high speed centrifuge about to blow its fucking bearings, that some smart ass decides it really is time to give gold  another whirl.

What !!! fucking heresy. Fuck it

And fuck what the desperate old cow yellen says or the MSM. Or that nazi cocksucker krugman

And the rest start to follow just like the good sheep they are.

Am I glad I got there first.