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Wall Street Prepares To Reap Billions From Another Main Street Wipe Out
On Monday evening, we noted that market participants are reducing the size of their trades and turning to derivatives in order to avoid the perils associated with what are increasingly illiquid markets.
While we’ve been pounding the table on bond market liquidity for years, the rest of the world (operating on the standard 2-3 year time lag) has just begun to wake up to how thin markets have become. Now, pundits, analysts, billionaire bankers, and incorrigible corporate raiders alike are shouting from the rooftops about the pitfalls of illiquidity. The secondary market for corporate credit has received the lion’s share of the attention (for reasons we outlined yesterday) and as Carl Icahn was at pains to explain to Larry Fink last week, ETFs are a large part of the problem.
The story is simple. Shrinking dealer inventories (the result of a post-crisis regulatory regime wherein the term "prop trader" is taboo) have made it harder to transact in size without having an outsized effect on prices for corporate bonds. Meanwhile, artificially suppressed borrowing costs and the attendant hunt for yield have led to record corporate issuance and voracious investor demand. In short, the primary market is booming while the secondary market has become a veritable no man’s land. If you need an analogy, try this: the crowded theatre is getting larger and more crowded while the exit keeps getting smaller.
The proliferation of ETFs has made it easier for the retail crowd to chase yield in corners of the bond market where they might not have dared to venture before, and this has only served to create still more demand for things like high yield credit.
Now, with the US staring down a rate hike cycle, and with some corners of the HY market (see HY energy for instance) facing a number of insurmountable headwinds going forward, the fear is that the retail crowd will all head for the exits at once, leaving fund managers with a very nondiversifiable, unidirectional flow which will force them to sell the underlying assets into illiquid markets. Due to a generalized lack of market depth, that selling pressure has the potential to trigger a rout. Of course a sharp decline in prices would send still more panicked retail investors to the exits necessitating even more asset sales by fund managers and so on, and so forth.
But don’t take our word for it, here’s WSJ with more on how Wall Street is preparing to profit from an unwind in Main Street’s ETF and mutual fund portfolios:
Wall Street is preparing for panic on Main Street.
Hedge funds are lining up to profit from potential trouble at some "alternative" mutual funds and bond exchange-traded funds that have boomed in popularity among retirees and other individual investors.
Financial advisers have pushed ordinary investors into those funds in search of higher returns, a strategy that has come into favor as Federal Reserve benchmark interest rates remain near zero. But many on Wall Street worry the junk bonds, bank loans and esoteric investments held by some of those funds will be extremely hard to sell if the market turns, leaving prices pummeled in a rush for the exits.
Concerns about such scenarios have been escalating for some time. Now, investment firms such as Leon Black’s Apollo Global Management LLC and Oaktree Capital Management LP are laying the groundwork to cash in if they come to pass.
Apollo has been raising money from wealthy investors and portfolio managers for a hedge fund that snaps up insurance-like contracts called credit-default swaps that benefit if the junk bonds fall. In marketing materials reviewed by The Wall Street Journal, Apollo predicted: "ETFs and similar vehicles increase ease of access to the high yield market, leading to the potential for a quick ‘hot money’ exit."
Guided by a similar outlook, Reef Road Capital Management LLC, led by former J.P. Morgan Chase & Co. proprietary trader Eric Rosen, has been betting against, or shorting, exchange-traded funds that hold junk bonds and buying options that will pay off if the value of these high-yield securities falls.
The hedge funds are taking aim at what is regarded by many on Wall Street as a weak spot in the markets. "Liquid-alternative”" funds have emerged as one of the hottest products in finance, fueled by a promise to deliver hedge-fund-style investing to the masses. They use many of the same strategies as hedge funds, with wagers both on and against markets, but are open to less-wealthy investors with fees closer to mutual-fund standards.
Liquid-alternative funds manage a cumulative $446 billion, according to fund tracker Lipper, up from $83 billion at the start of 2009. High-yield bond ETFs, another popular product, manage more than $38 billion, and in the week ended last Wednesday took in their biggest inflows on record at $1.5 billion, Lipper said.
Activist investor Carl Icahn brought the issue to the fore last week, saying at an investment conference that he feared a bubble was expanding in junk bonds thanks to the rush into high-yield exchange-traded funds run by companies like BlackRock Inc.
Managers of ETFs and liquid-alternative funds said they are well-protected against any tumult. Some have lines of credit to cover redemptions if needed and point to research showing that even during past crises, mutual-fund investors generally withdraw no more than 2% of assets each month.
When Reuters first reported that fund managers were lining up emergency liquidity lines like the ones mentioned above, we smelled trouble and were quick to note that not only did that not bode well for the market, but that funding redemptions with borrowed cash is a fool's errand and depends upon the market stress being transitory (see here and here). But beyond that, it betrayed the extent to which the country's largest and most influential ETF issuers have become worried about just the type of meltdown the hedge funds mentioned above are banking on.
If you want a candid take on just what the smart money thinks is ahead for all of the retail money that's been herded into esoteric ETFs, we'll leave you with the following from David Tawil, president of hedge fund Maglan Capital, who spoke to WSJ:
"They are going to be toast. It will be one of our first levels of shorting the moment we start to see cracks, because it’s ripe with retail, emotional investors."
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Stupid crackers
who knows how long this manipulated market will last? I thought the party would be over long
ago but it keeps going higher while gold and silver get hammered. I am going to just sit and
wait until the party is over. That is when I cash in some of my chips (PMs)
"If god did not want them sheared, he would not have made them sheep."
-- Caldaron, Magnificent 7
#41
We're all sheep...props for the reference though
word!
It's interesting to note how they call them dealers who hold inventory....
Makes banking sound like a legitimate business...
Hi, I'm Bond, Crashing Bond...
Retail, emotional investors.
There it is. That guy that just leased a new 3 series and took out a home equity loan for a new kitchen and vacation to the Bahamas -- that guy is going to get creamed.
Darwinism in investing.
No, no, no! We are all DEAD CANARIES!
Add dead pensioners to the list.
Well some of us are Rams, but you know what that means...
#41
Weren't rams the ones that were put on the altars of old to have their throat slit?
If you're part of the Retail Crowd, I have no sympathy. The signs were posted since 2008. That fact that you were too stupid to read them doesn't count. You're an idiot for putting any money into the market when it is obviously rigged to scam you.
In this instance, I hope you get every loss coming to you. I don't care, I hope you get fucked in the worse way. The warnings were raised damned near eight years ago and you continued to put money into the system, enthused as the market went higher...and thought you had wealth.
LOL.
I listened, and stayed out of the stock market, while it went from 666 to 2100. Thanks for nothing.
Don't feel bad -- I listened, bought gold and silver, and am now down $40k.
Popcorn.Don't forget to buy the popcorn.
maybe some vol, too?
This would assume the following:
Retail investors(and they are...where?)
Volume(mostly made by BOTS)
Government non-intervention(when has that happened since 1987?)
Those emotional retail investors are indeed machines. When machines start emotional selling it is pretty much straight down - 0 or 1 -
The Wall Street Broker and the Central Banker are as American as the Bald Eagle. Yes you understand that symbol..of FREEDUMB.
Watch this video of DOZENS of Bald Eagles...
https://www.youtube.com/watch?v=MoqOYACbFjI
...SCAVAGING the remains of DEAD CARRION.
Yes. The symbolism is undeniable.
But unlike what happens at Wall Street and at the Banks...the Police actually showed up to break up this motley crew, this ring of undesirables...fucking scavangers.
That is what America is about, folks.
The title needs to read, "Wall Street to Reap Billions from Scavanging the Carcass of the Once Vibrant Main Street.
Awwwwwwwwwwwwww...
Someone is butthurt watching the Bald Eagle, the United States symbol of National Pride, behaving as it is, a true scavanger.
Awwwwwwwwwwwwww...
A Entitlement mentality STATEist, Socialist cannot handle the truth, after seeing that video.
I am just so sorry.
"My God...What is next??? They are now even attacking...the Bald Eagle. It is a shame...a crying shame. We must pass a law to prevent that. That symbold of THE SCAVENGER must be protected at all costs!!!"
Let's go easy on the all night drinking binge Tom.
I do not drink.. I make no time for that.
I do not use drugs. I make no time for that.
But I do make plans. And I have plenty of time for that.
I educate myself continuously...about topics that you will find arcane and yet I see the applicability.
Come on over and let me show off my Chemistry Lab and my metallurgy lab.
Let me show you my collection of Rockets
We will have a blast....
12223B Woodside Ave. Lakeside, CA USA.
Have you ever read the Unabomber Manifesto? Now that man makes sense.
In fact most here will be most agreeable to what he has proposed.
Here it is for download...
http://www.pdfsebook.com/read/unabomber-manifesto-aHR0cDovL3dlYi5jZWNzLnBkeC5lZHUvfmhhcnJ5L2V0aGljcy9VbmFib21iZXIucGRm/
What is funny is that we came from the same school. We both studied Math.
Uh....NSA/FBI knocking on your door in 3 -2 -1.....
He's entirely correct. Go to Glacier Bay sometime, and watch the bald eagles flock to the pier where the fishing boats dump their non sellable parts, the adults pecking away the juveniles until they've had their fill. Anywhere there is society, they behave like this.
And every August, when the salmon line the river beds, they behave like this.
its all because they LOOK "majestic"
The crow should be our national bird. Damn, those buggers are SMART!
We had one that used to torment our blind cat. He'd wait till she found her water dish and started drinking, then he'd use his beak to pull the bowl just out of her reach, and do a "victory dance" all around her while she poked around trying to find the dish. Then he'd do it again.
Well, ok, maybe he was more of a dick than a genius...
LOL! He did a victory dance...
Crows are smart for birds, but most days I'd like to shoot their loud cawing ass out of the trees.
I think someone suggested the turkey as a better national bird. Maybe, I don't know. We have lots of wild turkeys around here, and they don't seem to bright. And they do something that reminds me too much of a lot of folks these days...When there's a bunch of 'em, picking around, and you startle one, it starts to cluck. Within seconds, they ALL start clucking. Like reflex, just mindlessly repeating what they hear from someone else.
It's funny as hell.
Ok, lets assume we all got our popcorn sorted. What should one drink with it? Should I go with the Scotch or the Red Bull? Maybe Red Bull for the rallies and Guinness for the crashes. Or should I go contrarian? Fuck I just don't know.
Personally I prefer Mountain Dew for all of it. The Orange Juice and Corn Syrup fuels the caffiene stimulation.
Keeps you sharp and alert. That is what is needed in times like these..a heightened state of awareness. It is called..oh...the Military Terminology...yes...Situational Awareness.
If they are to teach that to their troops to employ against you then it is to your advantage to have the same understanding.
There is no time for anything else...We hace crossed the Rubicon and are past the event horizon of the abyss, where no natural law rules and the rules of normality has forever been suspended. There is no escaping the outcomes to any hazard as they present themselves. The only alternative is to MITIGATE the CONSEQUENCES at this point.
Being unaware guarantees the fatal outcome over the dismal outcome. And anything which serves to dull the senses is imprudent in this time of grave urgency and peril.
Alertness to the dynamic, hazard filled environment is the order of today and those days which are to follow..
absolutely long on popcorn.
Come on. The cycle is the USA USA cycle. So collapse? couple of months prior to Nov. 2016...so the blame and rescue meme can be applied.
So that bitch can assume her Nazi throne,
so that must mean it's currently a Nigger Nazi throne.
Um, LO not so L (looking oveer both shoulders). I'll check back later to see if your post is still here, you rayciss.
Yeah - the racists have been here in force trolling over the last couple years. They attempt to discredit the dialog on the site with their babble in the hopes of driving in a wedge.
They picked the wrong audience - but they keep trying anyway.
What are we, a bunch of pussies? No. Did we give up when the Nazis bombed Pearl Harbor? No. We will never give up.
Ha yeah, I guess Stormfront is down again...I really wish they'd fix that.
Unwelcome.
Brilliant! And a hearty "FUCK YEAH" from me.
The Market can stay irrational longer than you can stay solvent.
I want more stawks...
Nope. It will line up neatly with the 2016 elections. dream and lies will continue likely to Aug? 2016. Need some lead timeto blame. And then the"rescue HOPE candidate" Frig it is so corrupt.
Maybe the Oct 2016 surprise? Ohhh, the suspense and Drachma is killin' me!!
No, not 2016. A whole new House takes over. In a serious economic panic, they might lose some of their MK-ULTRA programming and actually try to start doing something for the people. Way to dangerous for the PTB. So that leaves 2015. I don't think they can drive this already limping beast into 2017.
fear, the emotion that causes irrational trades built on irrational policy-it be a coming.
punt you say, why do that when the referee can say 1st 10 or call a penalty and move the ball to the ten yard line and first and goal on long ball interference. fuck ya, game is rigged, outcome wall street 49, pleb 0.
no liquidity, hmmm control alt infinite digital paste patch to cover any tptf losses all put on balance sheets with billions of skim profits; no worry the quid pro, jp and citi, well and the other 15 primary dealers wink wink nod all good, oh where is paulson shorting say what? auto loans this tyme?
or is it the bonds, junk, corp, treas or packaged junk underwritten by marginal car buyers?
corp buybacks with no zing? oil rigs stacked and idle w/50 bbl?
certainly the exits have a sliding back room door for the ptb, dirrectly into the fed board room where the yellow bitch can control alt swap, special overnite discount window funds...
fed balance sheet can be how large? and who really knows if it matters anymoar.
just fear to drive a trade, tyme for some action, what you been waiting for with same results, moar anger on tap...
the only thing that gets out of control is the reactions of the observers cheerleading doom that doesn't happen. don't even waste your tyme popping the popcorn, ignorance is bliss, and i'm head in sand minus the popcorn...
Eat this cracker, mudderfukher!
Suck those soup coolers back on that malt liquor before you get the whip again buckwheat.
Time to shear sheep and slaughter Muppets.
So DOW 25000!!!
Someday -yes
Next month. Blow off top.
Im thinking november or decembuary. Then again i dont think yellen will taper zirp
You know it, brother.
Today we had a management meeting (five fucking hours of lost time I could have used to to productive things) where the company's owner gave a lecture on how we should plan for retirement, invest in the market, and put the maximum money allowable into our 401-k's.
I'm sitting with the loud, non-PC, and one of us is this huge, tattooed, ex-felon, quietly calling bullshit on his entire lecture. [Side, whispered conversations were: "What's worth more gold or bullets" "Bullets, 'cause you can steal more gold." "If you're 75 and broke, what's the best thing you can do?" "Rob a bank, get three hots and a cot, free health care and you're too old to fuck."
Sorry, I egged him on, and brought out his real feelings on the bullshit of investing in today's society. Meanwhile, not ONE fucking dollar of mine is going to Wall Street. I deplete my bank account within days of any money hitting it. And I stopped sending ANY money to my 401-k in 2008.
I now have a six months food supply, about 3,000 rounds of Pb (FMJ) [Tattoo guy has 20,000, so I guess I have to step it up a bit], about two months water, [not enough, need six months], and I still don't feel too secure.
I only have eight ounces of gold, 30 pounds of silver...what do I do now?
Hit those yard sales...you'll double your holdings by fall. And at surprisingly cheap prices.
I'm averaging almost 8 grams a week in gold, and I don't even bother using the gram scale for silver...just pile it on the bathroom scale and get an estimate.
God, I wish I'd started doing this years ago...*sigh*
Go to your Human Resources Manager and tell them "I want every fucking penny in my 401-k cashed out and put in my hand."
Try it...
YOU CAN NOT DO IT. Your 401-k money cannot be withdrawn under almost any circumstance. Even a loan must be documented by hardship like you're about to be foreclosed on your mortgage, and the loan is only allowed to be enough to get your ass caught back up.
You [we] are already under capital controls, but most haven't bumped up against them, and most of you are putting your fucking money into the system.
If you're contributing to any sort of retirement account, count the money as confiscated. You're not going to see a dime. You, personally, curently owe $820K to the War Criminal Government of the USSA. Shove that up your ass, make it comfortable...because if you don't, when our WCG comes calling it will be very rough and unpleasant.
they'll say "you can have the other half when you leave the company"
its right in the fine print
It will be a great moment when these guys think they've scored big, only to find out a second later that their trades are nullified and the markets have been frozen.
come on and get real. Big Boyz never get shut out. Their trades go through. Force majeure is always on the retail side, Big crap gets out early and leaves pension plans and Mom and Pop holding.
Frozen markets have no concern because the big crap is already gone. Get with the shearing already and BTFD.
The "Big Boyz" are the banks not investment funds. If you don't take retail deposits you can be left for dead like the rest of the retail investors.
there ain't no Mom and Pop left in the market. It's all Fed.
Fuck...Tyler Durden is omnipotent...
http://www.zerohedge.com/news/2014-02-01/market-cornered-jpmorgan-owns-over-60-notional-all-gold-derivatives
http://www.zerohedge.com/news/2015-05-01/jp-morgan-cornering-silver-bullion-market
My wife will lend out her lube...it hasn't been used in several years...any takers?
We're all going to need it.
You are deluded if you think this ia anything but some fantasy. These guys do no get caught.
And you can stick your condescension up your ass.
don't get caught, hmmmm, why did the taxpayers have to cough up trillions of dollars to bail some stupid, we'll never get caught, muther fuckers??
So you're saying what? That they were stupid to get bailed out. Those fucks Dimon and Blanfein are billionaires. Where did that money come from?
"You didn't build that!"
Mebbe the shitass was on to something there...
We know from ZH (great job), that GS puffed up their balance sheet from $800B in "commodity" derivatives, to over $4T, just in Q1 15. Ditto for Citi.
We know the stupidest politicians on the earth, passed legislation, late last year, putting the taxpayers on the hook, for this disaster. We know the Gov is complicit, 'cause they moved PM derivatives to FX reporting. The buyer of last resort for these treasuries, is the Federal Reserve. Is this the greatest scam you've ever seen?
Nope
It's what comes after
declaring self help in 3...2...1..
Everyone sell everything tomorrow! Except....gold and silver bitchez...hehe.
"it's a big club and......."
fill in the blanks...
I'm not in it?
WORD!
.. ,,,,,the hookers and blow run out soon?
(Fire up the Gulfstream, Agnes!)
Fed initiates nirp the same week Kaitlin Jenner's reality show starts, and ALL is well.
Hey! Thats sexist!
Huh?
Got me thinking. How about "Katilin" rigs up a "Go-pro" for some real-time, reality vid posts when Californication goes "Mosul" on their lame progressive arses. Girlz gotta make a dime.
I'd subscribe for sure.....
There's another thing that Wall St is gonna reap: The Whirlwind.
Up close and personal. The dumb fcks just don't realise it... yet.
NuYawkFrankie:-"There's another thing that Wall St is gonna reap: The Whirlwind.
Up close and personal. The dumb fcks just don't realise it..." yet.
Pure fantasy. I wish it were true, but the Powers that be will use divide and rule, plus diversionary tactics to foster civil unrest between the masses, before they realise who the real culprits are. By the time that happens, these dual citizens will be long gone and our subserviant treasonous politicians will plead stupidity, coercion and not wanting to crash/kill the American dream, so they went along with it all.
Maybe a completely different Occupy Wall Street with Camping, Trailers, Trucks, Hotels filled up for 50 miles around... or the equivalent in NYC... Sleeping in Plazas, and Parks.
Big question: will they buy the entire real estate market like they did after 2008 or will there finally be a de-leveraging market clearing implosion. Panic selling by specs, flippers with no chair when the music stops, suddenly unemployed startup techies heading back home after defaulting on their over-priced rental leases and all that.
No wonder the big gold smackdown came in front of the bubble busting turd earnings.
If interest rates on dollar denominated assets suddenly hit 12% on the overnight that will justify NASDAQ 5000.
"Think about it."
Move along....
Just great
SH
Bingo! It all starts tomorrow.
"Sell, sell, sell!"
- Jim Cramer
You got it wrong, That kike is screaming buy, but BUY! To the dumbass sheeple Goy, he is helping to destroy.
Oh, that kinda rhymed, didn't it?
Yeah good luck with that. If they believe that we are going to see another 2009 they are nuts. When this illiquid market vaporizes there will be nobody left standing to collect from. The casino will be closed. Bye, bye, have a nice day. Here's your spider man towel.
Right on. The Fed would no more allow the big hedgies to fail than it would the big banks. If high yield bonds tumble, the Fed would buy them, or take them at its overnight window every day until the illiquid becomes liquid again. Anyone who thinks they can see a market collapse coming without reviewing Fed behavior in 2009 is simply dumb. Go for it guys, I hope you make money, but I ain't joining you.
That might be the way it plays out. But then there will be real increasing inflation each month. Until its no longer call "increasing".
Time to crack down on malicious short sellers, or anybody who intends to become one.
@BanksterSlayer : You meant to say "Time to crack down on malicious short sellers, or anybody who intends to become one unless its in the gold and silver market. Then they get a hall pass."
Please do. That miniscule number of brainless retail investors deserve it.
Stay (thirsty) hedged, my friends.
The reason why Donald Trump can get away with his insane rhetoric is because he knows what's coming, and he knows the average, poor US citizen will be very angry.
401Ks will be wiped out and people will have to work until the age of 70 before they can retire. Retire poor.
Donald Trump is just capitalizing on what Bernie Sanders has been saying for the last 20 years.
The communist Berni wants us to adopt a healthcare system from another country where the income tax rate is 46% and after you are done eating in you 890 sq ft house you get to buy mandatory gap insurance to cover what the mandated government healthcare insurance does not cover. Screw Bernie and his socialist , 60's hippie, communist bullshit
Bernie is a JEW. They cannot be trusted. They are parasites. End of story.
But you would trust a Roman Catholic Socialist? Or a avowed christian Athiest Socialist? How bout a Muslim apostate Socialist, better? Clean you buttplug, it's infecting your nerve endings. just a suggestion.
Keep an eye on the folks who the MSM tries to marginalize, ignore, or discredit, because these will be the ones who may hold the common good of the citizenry as a higher priority than the WELFARE of TPTB. Paul,
Sanders and Trump(although him for other reasons) are getting the Goebbles psyops treatment. If Rand Paul and Bernie Sanders could agree to address their common ground issues, while sidelining their contentious
issues, they could form a coalition that would scare the shit out of TPTB. And ifs & buts were candy & nuts, yada, yada. Divide and conquer tactics are very efficient in perpetuating a status quo. So if the current
trend/trajectory suits your needs then why not install a dynastic figurehead sure to keep it business as usual.
Paul & Sanders 2016!! sure, and Bigfoot and Elvis 2020!!
There are many who consider Bernie Sanders as an independent. These are the same people who view people like yourself to be a radical. Have you ever even considered that?
Yeah because the socialism we have now is so much better.
People can afford to retire before 70? Who knew?
Hell, NYC cops retire at 50.
The only jobs they'll get is volunteer work. Even walmart doesn't need any new greeters.
US Military at 37.
45
Better get that part-time WalMart or McD job now, so you have it when the economy crashes.
When do we get to the part where bankster slime and financial sector assholes are jumping out of skyscraper windows? Anything I can do to help this process along? It's taking forever and my patience is wearing thin...
I hear ya bro, but I just want it to wait a little longer so I can take advantage of Ms being on sale.
They'll walk out with their head held high, with no shame and no remorse and claim everybody was doing it and most importantly, they did nothing illegal, because the SEC, OKed it all. Regulatory capture!
Buy the down dip tomorrow during the day. were going higher, at least higher than todays close. Heavy hands bought the dip on S&P, again. it's incredible but one must go with da flow. If caution is very needed stay out, dont short either at least for now. I closed a short term short and bought a bit and another bit tomorrow for the last potential short term up swing. cheeers
Prepare to quit making money in financial markets. Things are getting dangerous.
My next investment will be gated cemeteries with no markings and guard towers for Wal*Street Bankers and Managers who have passed on.
And the ad will read. "Don't let millions of main streeters piss on your grave for the next 2000 years. Purchase a plot with us and become invisible when you're gone."
ONLY $1 million dollars....in gold.....per year.
Buy Now! This offer ends when all plots have been sold!
Sorry! We just sold out.
@ThrowAwayYourTV : Hilarious!! However I think you need to raise the ante some since the grave robbers might be on the prowl. Think of the urinal potential for some of these bones?
I'd suggest $2 mil in gold to make sure this didn't happen to anyone's loved ones. Pity when you think about it, eh?!
Yes, you're right! The lines to get in could get quite long and crowd control may become an issue. Then there's all that flood insurance.
Thanks for the tip :)
for a 3-5% commission, i can get you a wallymart plumber to help with flood @ 1M per; or a fe ma vet to help with crowd control @ 2M per.
Fair inflationary-ing price, be quick interested, exits are closing. ;-p
I'm long TZA, Short FXI, any other suggestions?
Long FAZ my friend
The countdown has begun. Get your positions ready.
Gold mining ETF's should therefore act the opposite and force miners higher, as they have to buy as investors pile in... driving it ever higher.
I lost my whole family! Fuck whatever street you want to call it!
SH
The Butt Family? (SNL)
OH, you mean you lost your ass...
I get it now. Muahahahaaa
fuck that, main street is preparing for a panic on wall street
Maybe just before this happens?Extend and pretend only goes so far:
http://www.kitco.com/commentaries/2015-07-17/The-Fed-Has-Set-The-Market-...
You can pay me now or pay me later but when it happens she'll be a biggy.
zerohedge, did it happen like this in 2007? did the big banks and main news outlet told people of how to prepare for the inpending crash?
IIRC, the crash was underway from March of 2007, when the first hedge funds started experiencing some major trouble. Bear Stearns brought it to the mainstream in July 2007, and after they were bought by JPig (I think it was?) the markets kind of staged a 'recovery' over the following year until the double whammy of Lehman and AIG to kick off the Panic of '08, until central banks rode to the 'rescue' and began socialising all losses.
So, it wasn't so much the MSM not warning of an impending crash, as it was the MSM saying, "That was the cleansing crash and now it's all over, don't panic, the markets have recovered". I remember reading a lot of "We're protected because CDS" nonsense thru the '07-'08 period.
Then, of course, during the Panic, it was "Nobody saw this coming". Meanwhile the blogosphere -- including Zero Hedge at blogspot -- had been lit up with the truth the whole time.
"Impending" doomsayers were more 2005, 2006. There were a few earlier, but alas, I was still safely grazing back then...
It was a simpler time...
"Halcyon days," I think they're called.
i'm confused, is the smart money the hedge funds that have gotten their ass kicked by the index funds?
its pay back for all the losing years they had
they will profit immensely from the ETF down fall
I just hope everyone gets their asses kicked equally(except the Bugz), a 10.9 earthquake hits san fran, lost angeles, and a titanic meteor breaks apart hitting NYC, DC and city of London simultaneously.
A fresh start would be refreshing. One can only dream *shrug*
so..buy way OTM puts on a bunch of ETFS? lolz
Theta is a bitch...but at least you get a tax loss carry-forward on expired puts. I've been loading up on ETF puts for 7-8 months now.
Tick tock, tick tock...
<<When Reuters first reported that fund managers were lining up emergency liquidity lines like the ones mentioned above, we smelled trouble and were quick to note that not only did that not bode well for the market, but that funding redemptions with borrowed cash is a fool's errand and depends upon the market stress being transitory (see here and here). But beyond that, it betrayed the extent to which the country's largest and most influential ETF issuers have become worried about just the type of meltdown the hedge funds mentioned above are banking on.>>
Tyler, some great articles tonight. The big banks are mostly out of this market, correct? So a stampede out of these assets would not affect them so much, as retail who has been running into these in a chase for yield, yes? (ETA: You seem to say that further down.) The 'type of meltdown' in this case might see the word 'risk' back on the MSM in a big way, since it's their audience who would mostly be affected. (To be followed by 'no-one could have seen this coming'.) If you're saying that the fact that this is now showing up on REUTERS is a big red flag, then I agree.
<<While we’ve been pounding the table on bond market liquidity for years, the rest of the world (operating on the standard 2-3 year time lag) has just begun to wake up to how thin markets have become. Now, pundits, analysts, billionaire bankers, and incorrigible corporate raiders alike are shouting from the rooftops about the pitfalls of illiquidity. The secondary market for corporate credit has received the lion’s share of the attention (for reasons we outlined yesterday) and as Carl Icahn was at pains to explain to Larry Fink last week, ETFs are a large part of the problem.>>
Only thing worse than being laughed at for being a 'perm-bear', is pounding the table for years and being ignored until it hits and 'nobody saw it coming'. You've been warning about anorexic volume the whole way.
<<The story is simple. Shrinking dealer inventories (the result of a post-crisis regulatory regime wherein the term "prop trader" is taboo) have made it harder to transact in size without having an outsized effect on prices for corporate bonds. Meanwhile, artificially suppressed borrowing costs and the attendant hunt for yield have led to record corporate issuance and voracious investor demand. In short, the primary market is booming while the secondary market has become a veritable no man’s land. If you need an analogy, try this: the crowded theatre is getting larger and more crowded while the exit keeps getting smaller.>>
I wonder how many retail investors 'own' bullion and other commodities in the secondary market? I wonder how many are aware of their ownership? And how many people are going to wake up to sudden risk in their safe pensions?
<<The proliferation of ETFs has made it easier for the retail crowd to chase yield in corners of the bond market where they might not have dared to venture before, and this has only served to create still more demand for things like high yield credit. Now, with the US staring down a rate hike cycle, and with some corners of the HY market (see HY energy for instance) facing a number of insurmountable headwinds going forward, the fear is that the retail crowd will all head for the exits at once, leaving fund managers with a very nondiversifiable, unidirectional flow which will force them to sell the underlying assets into illiquid markets.>>
My question is, can they afford NOT to raise rates, or is the market going to do it for them? With a UST 'dump' apparently taking on momentum (well, since last December?), is there any excuse they can find that can sound real enough? Because if there's any way they can avoid it, they will. They've postponed that moment for longer than most of us thought possible. I think they know what's likely to happen the first time they go anywhere near that hike button. After seven years of ZIRP, it could have a nuclear effect - these 'markets' exist only on 'free money'.
give it up. no blood, no justice.
Xanax can fix this.
Bloomberg TV stated about a half an hour ago that Jeffrey Currie from Goldman Sachs has forecasted the price of gold will go below $1000.
http://www.bloomberg.com/news/articles/2015-07-21/goldman-s-currie-sees-...
Means Goldie is buying gold and would like the price a bit lower.
Yes, You are focused where I should be focused more.
Buy Credit Default swaps
Great idea. What could possibly go wrong?
In simple terms, we are going to sell all the flood insurance we can before we blow the dam above the properties. Then claim the money is all gone and bankrupt the company. Sorry, folks.
Where is Bernie?
... and they think that their 'debtors' will pay up ?????
No, but the taxpayer will.
Get Ayatolla to build a nuclear dildo for Krispy Kreme Yellen
Lack of liquidity just means a lack of bigger fools.
An overblown market always has to reach the poinnt where there are no bigger fools.
Is the biggest fool going to be you?
Some of the rather bizarre market action recently has me wondering if we are in the middle of a bear market rally, and if so how violently it might end. Several stocks on an uptrend appear fundamentally unstable. We have witnessed massive moves in several speculative stocks like Tesla and Netflix that are hard to defend by any other reasoning than shorts being squeezed out of the market.
The higher the market goes the more vulnerable it becomes to a major collapse and sudden downward price move. A lack of short positions will bode poorly for the market if it falls rapidly because in such a situation as shorts take profit and buy back their positions they act as a floor under the market giving it support. The article below delves into how this could be a problem going forward.
http://brucewilds.blogspot.com/2015/07/is-this-bear-market-rally.html
High Bruce! I see you got a new ID.
Got house-cleaned by Tyler, but you are at it again?
"Déjà vu all over again"
Hillary will save the day