Rabobank: "Everyone Rational Wants To Sell, While Everyone Official Has Been Told To Buy"
The best summary of what happened overnight comes courtesy of Michael Every, head of financial markets research at Rabobank Group in Hong Kong, who was quoted by Bloomberg as follows:
While the government helped boost stocks at least twice last week, according to people familiar with the matter, equities extended declines into the close on Monday. Even if state funds come in to defend the 3,000 level, it may not ultimately work, according to Michael Every, head of financial markets research at Rabobank Group in Hong Kong.
“Everyone rational wants to sell, while everyone official has been told to buy,” said Every. “By throwing good money after bad, it just delays the inevitable.”
Every was referring to China; he could have been talking about every central bank anywhere in the world.
And then, a close runner up, is Deutsche Bank's Jim Reid who in his overnight note, explains just why "everyone official has been told to buy"
A map, a compass, or even a satnav wouldn't make navigating current markets much easier at the moment. While I was on holiday I couldn't help be interested by the Nevsky Capital letter explaining why it had decided to close down after 15+ successful years. The letter is worth a read but basically they suggest a lack of transparency and liquidity are making it very difficult to predict the future in a manner that allows for adequate risk adjusted returns. Transparency problems abound in EM with China at the forefront. They also argue that an increasing number of important EM countries are conducting 'nationalistic' policies over what had been a more transparent 'Washington Consensus' policy bias in the decade or so pre-GFC. This adds to the unpredictability. The liquidity issue is blamed on regulators and the rise of index funds and algos meaning that trading volumes have declined and badly executed trades can start an unintended trend in markets.
It doesn’t paint a particularly joyous outlook for global investors and supports our view that financial markets are broken but have been propped up by immense artificial central bank activity. We still think central bankers can still be relevant when inflation is so low (assuming no policy error) but we do think we're late cycle. Our view in the outlook was that we may have one more year left in the cycle before more difficult times arrive. Obviously the start of the year trading has increased the risks that this is too optimistic but we maintain our view for now. All in all it is a low visibility financial world with China having the ability to dictate performance with limited ability to analyse it properly in real time.
Because handing over the fate of the world economy and capital markets to a closed room of career economists... why what could possibly go wrong?
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Now that GS has to short positions on everything, your 'monthly' IRA contributions (run by MOMOs), well, you know how that works. STEP IT DOWN JANET
"7 years of contributions down the drain"
The big boys in Wall Street do not want to sell and will not if they have a choice. They have the free cash spigot open and will drive the market higher until it gets shut off. The only way a crash will occur will be during another Lehman BK type event.
Wrong. If you keep raiding the functioning economy's stores of capital / savings, it becomes the long-term equivalent of the townspeople raiding the farmers seed-corn to avoid having to go lean for a low-harvest season or two. Soon enough each harvest comes in shorter and shorter as less seed-corn remains for planting, begetting increasing calls for raiding deeper into the seed-corn.
Eventually the economic harvests cannot sustain the charade and economic famine ensues.
+1 on your real-world commodity example, but what if the farmer could just hit ctrl-seedcorn and satisfy those raids?
You can't print seed corn, you can only print claims on it. Sooner or later the farmer will reject the claims.
Unlike fiat, real wealth / savings / improved standard of living cannot by magically created by keystroke.
Without actual savings funded by forgone consumption, you have hand-to-mouth economy. There is no alchemy that can create real savings from nothing.
And yet from Klown-Krugman to the Fed and the world's central banks, they view savings as the problem, to be raided and redistributed, and do everything in their power to prevent it from growing precisely when it needs to be growing vs. the goose that lays the golden eggs.
We will get our just deserts for our economic illiteracy.
duplicate
My last month paycheck was for 11000 dollars... All i did was simple online work from comfort at home for 3-4 hours/day that I got from this agency I discovered over the internet and they paid me for it 95 bucks every hour... Try it yourself... www.wallstreet34.com
At this point please explain what is 'good money' and what is bad.
Good money is money spent on quality assets, like phyz, hookers, drugs, food. Bad money is money spent on stocks, bonds, iPhones, political donations
Is alimony good or bad money?
Consider it protection money. That's good....right?
<Do you want your beating now or later?>
Do you know why divorce is so expensive? Because it's worth it.
- Papa NoDebt
Collecting or paying?
If the ex lives next door, bad money, if they live out of state, good money.
The great philosopher Charlie Sheen once said that he didn't pay hookers for sex, he paid them to leave after sex. Such profound wisdom can in some cases apply to alimony
To quote another philosopher of the generation, Edward Murphy - no pussy is worth that much.
He was referring at the time to Johnny Carson and the millions that his ex wife got in the divorce.
Then there is Tom Lykias (spelling?) who simply calls it viginamoney instead of alimony.
The one I remember from Johnny Carson is:
"The next time I think about getting married,
I'll find some gal don't like and buy her a house."
to quote my former boss, "If it floats, flys, or fucks, you're better off renting."
Alimony depends on if you are paying or receiving.
So I am on the right track. I completely agree with you assessment! Thats the most sense I have heard in a log time. Thank you!
"Drugs will get you through times of no money better than money wil get you through times of no drugs."
Freewheelin' Frank
Money is a commodity that meets certain demands of the market. Unit of account, unit of exchange, store of value. Money is the oil that greases the wheels of advanced eocnomies, allowing trades and getting rid of the barter issue of the double coincidence of wants, and allows for credit flows, among others. To the extent that a particular form of money is chosen by the market to meet these demands, it is good money. To the extent that a particular form of money is foced upon the market, generally to manipulate it or as a negative externality that benefits a few oligarchs, it it is bad money.
@zerohedge ... remember the atari game "surround"?
Fox Business News Maria Bartiromo tweets that JPM's Dimon says if oil goes and stays at $30 for the next 18 months that the bank will increase its reserves by $500 mln
https://twitter.com/MariaBartiromo
thats a lot of pick pocketing
does it mean bank reserves or oil reserves?
edit: yea blonde moment its bank reserves. That is a lot of credit that will be sucked out the economy just cuz oil price sheesh.
Dimon is threatening the US Treasury.
By 'increase it's reserves' he means at The FED -where JPMChase is being paid interest payments from money that would otherwise be ceded to the US Treasury.
Remember how that 'London Whale' trade blew up?
Something quite similar and much larger is about to crash land on the balance sheet.
...& don't forget that what JPMChase calls a hedge is quite probably actually an enormous pile of derivatives written by/against it's own subsidiaries and TBTF Cartel cohorts.
Derivates which now have been provided post-facto seniority over the deposits of the Banks via the FDIC/US Treasury...
Maria Bartromo is a Wall Street whore. She's an airhead.
Jamie Dimon said the consumer is in good shape. What consumer? The ones in the Hamptons?
Not for Gold.
When the real economy sucks world central bankers want to keep equity markets artificially high. They will never stop meddling. However, this is the worst environment imaginable for real market-based investors. It is way past time to take my bat and glove home for good.
That's ok. TPTB have the ball and the game will go on without you.
Buzz, I think that is Nevesky's point. The game is rigged and you cannot make intelligent decisions. I have no idea how a professional fund investor can make any decent long range choices. Every market action to the downside gets a
In other words, even some of the big boys are starting to throw up their hands and walk away in recognition it's a rigged casino with no way to win.
The pros win no matter what. Its them trying to hedge their bets on not being a target of the 'torch and pitchfork' crowd.
In a rigged casino, only the riggers and a select few closest pals consistently win. All others, pros and amateurs alike, lose.
A rigged casino crucially needs outsiders not in on the game to play - a lot of them, both big and small. Otherwise the tables sit empty, not turning a profit. If unconnected participants exit en masse due to general collapse of confidence in markets, like expressed in the Nevsky Capital letter, the markets will become ghost towns. The riggers' game will be over.
TPTB have all the laws, courts, and guns of government to protect them. They are not worried about the torch and pitchfork crowd.
The market is like a Catholic congregation.
They have to be there whether they like the priest or not because the Lord commands it.
Only those with no reputation to save can avoid it.
I remember Greenwood, Mohawk and Woodbine racetrack Toronto Canada. All they did was run fixed races. Then they kept on losing one person after another. Word was slot machines were to be installed at the racetracks. That changed everything so they quote "unfixed" or ran honest races and the people started coming back. About one year later they installed slot machines and ever since then they've run honest horseraces.
Of course nothing like that could happen to the stock market where the FED and bankers rig everything making betting near impossible if they keep changing up their patterns.
It is because the government is "in" on the rig. They need to rig the interest rates low, treasury demand high and avoid the always increasing national debt from catastrophe. The govenment needs the bubbles.
I picture a room full of screaming people running from one side to the other with wheelbarrows full of paper.
I picture an ethernet full of algo's doing the same thing with digital 1's & O's (only faster)
I picture the Eye of Sauron with a laser frontrunning everything.
"Where's Beeks?"
Lots of people talking openly about the manipulation, even some in the MSM. That signals the end, it's down to who will be holding the bucket of shit when the music stops.
Got out early.
I can think of one swarmy bastard at 1600 Pennsylvania avenue who is eminently qualified
I like that! Musical Shit Bucket! Ah, but what would be the playlist? Happy Days are Here Again comes immediately comes to mind.
The 1%ers are still selling and cashing out. Only stupid people are staying in this market. They are going to get wiped out.
Here's to hoping...
The bi-monthly 401k and annuity contributions, etc.: fish in a barrell at a fish fry.
Same old story.
Which liars do you want to believe?
You knew it was a rattlesnake when you picked it up out of the now and saved it from freezing to death!