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The Real Great Rotation: Bond Funds Have Biggest Inflow On Record
Investors worldwide poured a net $15.8 billion into bond funds in the week ended Oct. 8. As Reuters reports, this is the biggest inflows in dollar terms since records began in 2001, according to EPFR Global. Money market funds also saw the biggest inflow since October 2013 as it appears the real great rotation is from stocks (biggest outflows in 9 weeks) into 'safe' assets.
The up-in-quality, and up-in-capital-structure trade is alive and well, as BofA notes, investment grade inflows exploded as high-yield spreads widened further - now at one-year wides (despite small inflows).
"Money is flowing out of PIMCO," warned one analyst but as BofA notes, PIMCO flows are reported monthly and so it is unclear as to the extent these flows are "overstated."
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why would they run to bonds for a safe haven?
its just paper, payable in paper...
we are having deflation, to be followed by inflation...
on a MACRO level...
Cause they have been conditioned to run to bonds at the chime of a market crash. You be dealing with Pavlov's mutts here matey, not rational human beings.
4000 Ebola deaths, US troops in Liberia, Sierra Leone burial teams, NYC plane cleaners strike
http://wtfrly.com/2014/10/10/4000-ebola-deaths-us-troops-liberia-sierra-...
I think this comment is spot on. "Reflexivity." But bond markets are not going to solve the problem of Ebola.
when econs slow/shut down bomds will need more willing pavlovs to fund "da crisses", ha...
Again "I terest rates can only go up from here." Same goes for total return I might add.
What's the panic for? Makes no sense to get into treasuries in a big way now. Gold has collapsed, silver has collapsed, oil is still collapsing (did the Saudis stop producing at ten bucks a barrel?) ...lots of low to buy higher here...just know your cost basis.
Obviously people are buying with dollars as there is no good reason for the dollar to surge.
when econs slow/shut down bomds will need more willing pavlovs to fund "da crisses", ha...
I believe the great thinker and sage of our time, Ron White, has already answered your question with a simple quote,"You can't fix stupid!"
It doesn't matter why. It's important confirmation of the Risk-Off trade mentality that has taken over firmly. For persons interested in the Stock Market; it means the bottom is a long way off; Stocks will continue to have rallies, some of them no doubt impressive, but the indexes will continue to decline. There's finally enough bad news to add up to a decision on the part of the people who matter; the Big Money people, that risk off is the new mantra. As you will see the Fed. Res. and it's so-called printing; will have no effect on this. Time for one more internet wisdom to die. The heavy hitters are buying Gold like its going out of style. I mentioned during my all-nighter monitoring the world; that I saw a Metric Tonne come up on offer in Zurich and it was bid and gone in seconds. That's a metric tonne of Gold; to an individual. The premiums as you would call them, the bid ask spread was tiny. The basic reason is Mark Twains famous quotation, "I'm no longer interested in the return on my money, but the return of my money". Dollars are still functioning currency units. I suppose this decision is reversible; when or where or how we'll get notice of that I don't know. T he stock market is such a part of the national psyche, that someone will always be buying them; all the way down, as they say. I don't have any crystal ball. I don't know wha t next week will look like in the stock market. But the main take away from this article is that Risk-Off is the new wisdom amongst people with enough money to move the Bond Market. It's very difficult to guess how much of this has already been accomplished. I think the thirty year in particular may be at at least an interim high; it appears that it will be very difficult for it to get any higher that it closed today. As long as these people keep up their managed sell outs of their positions in the stock market the indexes will continue down. it's not in their interest to cause a crash; they need buyers to get out.
I am sure I will regret finally cashing in a "right good" amount of my long term TLT holdings on this double bottom? Don't worry, I still carry a lightly hedged bet on more non state taxed treasury bond interest, and further cap gains. I don't brag except when I'm not bleeding.
What's TLT ? it's some kind of ETF; but what is it ?
Money is flowing into safety. Next week the commodities are going to spike as cash is liquidated into tangible assets.
Bond yields are flat in the United States because there isn't TRUST. Who missed the bond ghost?
The usd is going to TANK next week.
Stop getting my hopes up damnit. I've been waiting 5 years for this movie to start.
The USD is going to tank. Why. they have the Pound and the Euro to crucify first; they're putting their money in US Bonds.
Which tangible assets? Warren Buffet already bought a Railroad; did you miss the anouncement? If smart money is smart at all, it is in t he manner of its application; they can buy a lot of gold and silver without driving the price up much at all; which is what happened this week. driving prices up on the buy is counterproductive.
And Fed is pushing yields down with demand...cheaper for US to finance the time bomb...commodities will get next wave...who know what prices do...paper gold and silver are endless..stacking is better than paper but can be influenced .owning assets that are don't have leverage and no bank involvement that are free of a SS# makes a ton of sense...maybe wealthy Europeans aren't that crazy buying paintings, art, cars..not sure on stamps or baseball cards ....coins are have been good, market is behind the times a bit...but I'm sure will catch up with technology and exposure... trading currancy makes a ton of sense, just need an algo you can trust...
Exactly. There is 1 and only 1 semi stable path out of this and USD / financial assets are gonna fall relative to real assets, but via gold skyrocketing.
Either that or the biggest case of blue balls in ZH history
I'm dying to pull the trigger on a bond fund paying 1.3%. What could go wrong?
Buy that Treaury debt while you can, boyz 'n' girls! They ain't making any more!
There you go. Unless you think the sky falls, really falls, then Ts are as precious as gold, actually more precious than gold.
Still better than stocks that could lose up to 50%. Capital preservation is more important than return.
what's the presevation when you pay $123 to get almost no interest and $100 back?
I've owned long-dated government bonds since 2011 and am up about 30%. Pay attention to real life, not what fear you're sold.
Note: I am also a holder of precious metals.
There's no perfect answer.
sam clemons - if that is sent towards - me. i agree. you got in good. if i get in today - can i expect to be up 10%? you would be up 30% already - do prices always just keep going up? hope you see this and can explain it to me.
"Fool me once shame on you, fool me twice shame on me."
so they chase retail out of stocks and into bonds while the smart money winds out of bonds and into equities. they can do this forever, can't they? or can they?
That's not what we're seeing here. The BIG Money is going into bonds and out of the stock market. I don't like the term smart money; it often turns out not to be; but there is such a thing as big money.
well tyler deserves our thanks for posting this; it's really good to have so many odd fragments all added up in one place.
HG corporate bonds are senior to the equity tranche that will be eviscerated in the great liquidation to come
I double/ checked HY and IG. I'd say those charts are FUCKED
Divergence much?
Who fills he gp/ebs gap on Sunday?
I'm short usd.
You've been saying that for a long time now. How are you even alive courtesy of the past year? This is the biggest move higher in the dollar since records have been kept post 1973....
when one looses his ass he lies so as to not admit stupidity. stupidity is opening ones mouth. that why i say stfu...
I dont recall asking you...so STFU.
My wife's flows are also reported monthly and you can bet it is crystal clear as to the extent these flows are overstated
My guess, CXash flows back into bonds. I'm thinking bonds will define the equity markets, next week.
I'm short usd, and long spreads.German Bunds are over bought, as are AAA+ australian bonds. Might hedge those two.
Even better Quiet Riot - Breathless - YouTube <> Def Leppard - Another Hit And Run (Live) - YouTube
No prisoners Bitchez
Judas Priest Chains is awesome!
Who's better? Alex Van Halen or Neil Peart from Rush?
For short bursts I like Alex. For long artistic solos I like Neil.
Alex Van Halen Drum Solo - YouTube
Neil Peart Drum Solo - Rush Live in Frankfurt - YouTube
I like Alex Van Halen, but I find his drum solos boring as hell. I'll take Peart.
Alex Van Halen? Pfffft. Neil Peart is talented but he knows who the god of drumming is - Buddy Rich.
https://www.youtube.com/watch?v=9esWG6A6g-k
https://www.youtube.com/watch?v=WK2OV9D_Pcs&index=1&list=UUjD35l6_hbz6O9...
With respect to Buddy Rich, as well as 'modern' rock percussionists (Grohl, Ulrich, Cameron), it's really not fair to compare anyone with Peart, Keith Moon, or John Bonham.
All hail Ginger Baker
Why?
I just read Bill Gross' comments from Janus. Sounds like he's expecting financial Armageddon. He said “Picture perfection or fairy tale endings, do not describe the global economy or even its financial markets.”
Bill sounds more like Dr. Doom than King Bond. I realize that this is old hat here, but it must be an accelerating decline for Gross to mention it in public.
This is bullish for stocks.
B-T-F-D
If money is flowing into bonds, the ramp is on! Git yer high grade debt over here. What could go wrong? A business, a government - what difference does it make? Remember, debt = affluence.
debt is the new wealth, got debt?
I'm not a bond man.
New herd behaviour (from stock to bonds), but this time is a hurried herd (from elsewhere to stocks was a slow herd).
That's the begining of you know what.
Get out of the burning theatre in order, please.