Mysterious Dip Buyer Found - Goldman Buyback Desk Has Busiest Day Since 2011

Tyler Durden's picture

On Tuesday, in "Even The Dumb Money Is Dumping Stocks Now," we highlighted weekly flows data from BofAML which showed that not only were hedge funds and institutional clients (still) selling in the five days ended 8/07, but private clients were net sellers for a second consecutive week, dumping the most equities in a year. 

But not everyone was selling last week.

Stocks still benefited from the perpetual corporate management bid that’s helped to sustain the equity rally since the flow from that other price insensitive buyer (the Fed) tapered off. 

Given the above - and given everything we’ve said this year about debt-funded corporate buybacks buoying equities - no one should be surprised that Wednesday’s magical levitation came courtesy of US corporations. Here’s Bloomberg with more

Who did the buying as U.S. stocks staged the biggest turnaround in three years? The companies that issued them.

 

The Goldman Sachs Group Inc. unit that executes share buybacks for clients had its busiest day since 2011 on Wednesday, according to a note from the firm’s corporate agency desk. Based on the value of equities repurchased, volume handled by the bank set a record. The note was confirmed by spokeswoman Tiffany Galvin.

 

Corporations have emerged as one of the biggest sources of fresh cash in the stock market, eclipsing even mutual funds with more than half a trillion dollars spent last year, according to data compiled by S&P Dow Jones Indices. They swooped in and bought again on Wednesday as the Standard & Poor’s 500 Index flirted with its largest two-day selloff since January.

In short, today should serve as a real-world example of what GMO's Ben Inker said in the firm's latest quarterly letter: "...in order to see massive changes in the price of a security, you don’t need the price-insensitive buyer to become a seller. You merely need him to cease being the marginal buyer. If price-insensitive buyers actually become price-insensitive sellers, it becomes possible that price falls could take asset prices significantly below historical norms."

Oh, and by the way, here's what we said early in the session:

Comment viewing options

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

Zerohedge is really and truly slipping.  The Tylers should be ashamed.  Todays turn around had no breadth, it was AAPL, up over 5% that drug everything else with it.  40 billion with a B boys and girls on 12 Billion worth of transactional volume.  

 

Basically someone probably put 100 million on long Apple calls and and created probably 100 Billion in market cap.  Riggged, nah.....

cheeseheader's picture

Gator...'basically probably'; 'created probably'.

 

You forgot maybe, could've, might have, kinda sorta....

 

Get a grip, gal, AAPL is ovah.

 

Clockwork Orange's picture

Zero doubt that as GS scooped up their fees buying the dip, manufacturing the psychological 'kick-save' at the 200 day moving average, their proprietary desk was selling shares hand over fist.

When this ponzi blows, let's make sure there are gallows involved.

JC-BI's picture
JC-BI (not verified) ted41776 Aug 12, 2015 7:12 PM

Goldman Sachs=one of the founders of the Fed >>

https://biblicisminstitute.wordpress.com/2015/07/28/how-the-ashkenazi-je...

johngaltfla's picture

Man, look at the chart. GS is sooooo fucked. It's a repeat of 07-08 for the squid baby. And they are about to get it up the azz ChiCom style.

razorthin's picture

Go ahead, mother fucker, buy back into the crash and we will see your ass no more.

I am a Man I am Forty's picture

Apple doing what it's supposed to be doing, protecting the stock price with it's own cash.  Doesn't take a genius to figure that out.

Baby Eating Dingo22's picture

Eddie Lampert held up dust bowl SHLD for years doing that

Oldwood's picture

Makes perfect sense to me. Corporations buying up stock on the dip with borrowed money at damned near zero interest. None of them give a damn if the loans are repaid and they keep their stock prices/personal incomes up. Defending their positions with free bullets.

Jumbotron's picture

** BREAKING NEWS **

Hitlery Rodham Nixon had TOP SECRET spy satellite data on her email server.

 

 

Most seriously, the Inspector General assessed that Clinton’s emails included information that was highly classified—yet mislabeled as unclassified. Worse, the information in question should have been classified up to the level of “TOP SECRET//SI//TK//NOFORN,” according to the Inspector General’s report.

You may have seen acronym lists like these on declassified documents before—and glazed over them. This is the arcane language of the cleared cognoscenti so let me explain what this means:

TOP SECRET, as the name implies, is the highest official classification level in the U.S. government, defined as information whose unauthorized release “could cause exceptionally grave damage to national security or foreign relations.”

SI refers to Special Intelligence, meaning it is information derived from intercepted communications, which is the business of the National Security Agency, America’s single biggest source of intelligence. They’re the guys who eavesdrop on phone calls, map who’s calling who, and comb through emails. SI is a subset of what the intelligence community calls Sensitive Compartmented Information or SCI. And these materials always require special handling and protection. They are to be kept in a Sensitive Compartmented Information Facility or SCIF, which is a special hardened room that is safe from both physical and electronic intrusion.

TK refers to Talent Keyhole, which is an IC caveat indicating that the classified material was obtained via satellite. 

• NOFORN, as the name implies, means that the materials can only be shown to Americans, not to foreigners.

In short: Information at the “TOP SECRET//SI//TK//NOFORN” level is considered exceptionally highly classified and must be handled with great care under penalty of serious consequences for mishandling. Every person who is cleared and “read on” for access to such information signs reams of paperwork and receives detailed training about how it is to be handled, no exceptions—and what the consequences will be if the rules are not followed.

In the real world, people with high-level clearances are severely punished for willfully violating such rules. At a minimum, those suspected of mishandling things like NSA “signals intelligence”—intercepts calls, emails, and the like—have their clearances suspended pending the outcome of the investigation into their misconduct. Any personal items—computers, electronics—where federal investigators suspect the classified wound up, wrongly, will be impounded and searched. If it has TOP SECRET//SI information on it, “your” computer now belongs to the government, since it is considered classified.

People found to have willfully mishandled such highly classified information often face severe punishment. Termination of employment, hefty fines, even imprisonment can result. Yes, people really do go to jail for mishandling classified materials. Matthew Aid, a writer on intelligence matters, served over a year in prison for mishandling TOPSECRET//SI information from NSA, for example. The well connected tend to avoid jail, however. Sandy Berger and John Deutsch—who both served in high-level positions under President Bill Clinton, did not go to prison for mishandling TOP SECRET intelligence (though Berger got probation and was fined $50,000).

nmewn's picture

"I did not have email relations with that server. Not once, not ever." Hitlary! 2.0

Pool Shark's picture

 

 

Everything Hitlary says is proven to be a lie three weeks later...

gatorengineer's picture

Since when did breaking the law by the 0.01 percent become a crime.

Oldwood's picture

How can they be exceptional if they are not treated as an exception?

Unknown Rider's picture

Forget willfully violating rules. You get hung for negligent violation too. If you take something from a classified source, you as the derivative classifier are responsible for maintaining the classification of the material in the source document or in the security classification guide - if the source isn't marked you are still responsible for determining the classification based upon guidance in the SCG. Failure to comply with this responsibility lands you in the hot box. She is guilty of crimes that would have someone of lesser stature fired, ineligible for future employment and probably in jail.

monad's picture

np. Patsy, go with these nice men in black. Its good to be AIPAC's candidate. You would think Israel would have an extradition treaty with their best and only friend.

Grinder74's picture

"Hi, my name is Emaily, and I'll be your server tonight. Can I tell you about the [Big] House specials?"

Grinder74's picture

Sure be nice if someone could put this much effort into the apparent Identity Theft committed by Barry Soetero.

mctimm's picture

The tide will go out soon enough and it will become evident that the emperor has no clothes.

 

mtndds's picture

Damn smart and sneaky.

 

conscious being's picture

Let it die already. Did Ariel Sharon ever kick the bucket?

Tsar Pointless's picture

Smells like...uh...hmm...oh! Fascism! 

noronoro's picture

Again, useless data to be publised when cash market is closed.

buzzsaw99's picture

it's the same old shit.

levered buybacks/buyouts - bonus

issue stock/ipo - bonus

no matter what happens it always makes the maggots richer. that is the only constant and unchanging aspect.

cowdiddly's picture

Im calling bulshit on this. You mean to tell me that companies across all the spectrum of businesses decided at about 1-2 oclock to in mass start buying up their secondary issues all at the same time? What, did Goldman call thousands of muppet CEOs and say nows the time to pull the trigger boys? I realize that zirp makes raising money in the junk corp bond market easy and this money is going into stocks but all at the same hours in record amount?I ain't buying it.

Tsar Pointless's picture

You don't possess a vivid imagination then. And you're not criminally minded. 

Ness.'s picture

The rallies the last few years have been driven by low volume opportunities recognized by algos who fist fuck each other to front run company buybacks.  Well, that and Citadel executing on behalf of the NYFED trading desk.  

It's not a trick.

"It's an illusion.  A trick is something a whore does for money... or cocaine."  ~ GOB Bluth

JoWazzoo's picture

Absolute total Horse Shit.  Glad I bailed on a SPY Put about 30 minutes before the massive run up began.  No big insight on my part, just took a tidy profit.  Almost bought it back late in the day, but BS market like todays makes me real nervous.

 

Don't forget - Jusr BTFD!!!!!!!

Dollarmedes's picture

If the S&P500 has a market cap of about $2 trillion, and the averted plunge was 1.5%, that's about $30 billion. US Corporate cash is supposed to be about $1.5 trillion (money on the sidelines, HA!). I guess the question is, how much of that $1.5 trillion does Goldman Sachs have access to, and are other coroporations buying the dip now as well?

If we're about to enter currency wars with successive rounds of weakening, it would seem like a good time to get rid of cash.

NDXTrader's picture

Haha! What?! Is this CNBC or Zero Hedge. Today was buybacks? Lol. Those are scheduled well in advance and are trickled in. One thing moves the markets like today - central banks...period

Downtoolong's picture

I saw a pop up notice on Bloomberg that AliBaba was about to buy back shares. Nothing would surprise me at this point. The illusion must be maintained at all costs.

Keltner Channel Surf's picture

For a long time I've suspected that SPY 200DMA is the snap-back catalyst, not because of magical 'technical' properties, but because 'someone' (hint: rhymes with 'cold man') is advising all their buyback clients, most of whom are not sophisticated re: market mechanics, that this MA is a sign of a bargain, which of course allows them to front run, since these aren't visible resting limit orders, but a rules-based dictum that allows them to unleash their short-goosing algos as 'client instructions'.  That's my conspiracy theory of the day, and I'm sticking with it :)

Arthur Schopenhauer's picture

Goldman Sachs must have sent this inspirational quote out to every big corporation today:

"Don’t save every nickel. Invest in yourself."

--- Henry Ford 

TheRideNeverEnds's picture

Well what would you do if you ran some of these failing companies then?

Why would you not issue loads of debt at all time low rates to buy a stock whose very price determines your personal compensation?

I would, sheeeet.. I would do that till they de-list the company. Why? because fuck them that's why, I got mine and now off to the next thing.

If you disagree you can add not thinking like this to the list of reasons why Jamie Dimon is richer than you.

fowlerja's picture

Wait...let's look at the big picture...Goldman Sachs flushes money into the stock market to get things back on track..sounds like a plan of many put into action by one...but let the Chinese flush money into the currency market..well that's just so unethical...this requires serious attention and action by the "big financial" boys...I mean this is just not fair..

tommylicious's picture

FUCK YOU, CORPORATES!!  BASTARDS!!!!!!!!!!! 

Midnight Rider's picture

Imagine how much Goldman is making front running all those corporate buyback orders.

onmail's picture

TOP SECRET : American govt. is a criminal & terrosist organisation.

 

Backed by these satanist vampires 

damicol's picture

simples.. GS (GS) told GS (Fed) to get the back of GS (GS).

buy buy my beauties, buy and buy and never rest

Mick Shrimpton's picture

I guess we're all going to be working for the banks soon.