The "Mystery" Of Who Is Pushing Stocks To All Time Highs Has Been Solved

Tyler Durden's picture

One conundrum stumping investors in recent months has been how, with investors pulling money out of equity funds (at last check for 17 consecutive weeks) at a pace that suggests a full-on flight to safety, as can be seen in the chart below which shows record fund outflows in the first half of the year - the fastest pace of withdrawals for any first half on record...

 

... are these same markets trading at all time highs?  We now have the answer.

Recall at the end of January when global markets were keeling over, that Citi's Matt King showed that despite aggressive attempts by the ECB and BOJ to inject constant central bank liquidity into the gunfible global markets, it was the EM drain via reserve liquidations, that was causing a shock to the system, as net liquidity was being withdrawn, and in the process stocks were sliding.

 

Fast forward six months when Matt King reports that "many clients have been asking for an update of our usual central bank liquidity metrics."

What the update reveals is "a surge in net global central bank asset purchases to their highest since 2013."

And just like that the mystery of who has been buying stocks as everyone else has been selling has been revealed.

But wait, there's more because as King suggests "credit and equities should rally even more strongly than they have done already."

More observations from King:

The underlying drivers are an acceleration in the pace of ECB and BoJ purchases, coupled with a reversal in the previous decline of EMFX reserves. Other indicators also point to the potential for a further squeeze in global risk assets: a broadening out of mutual fund inflows from IG to HY, EM and equities; the second lowest level of positions in our credit survey (after February) since 2008; and prospects of further stimulus from the BoE and perhaps the BoJ.

His conclusion:

While we remain deeply skeptical of the durability of such a policy-induced rally, unless there is a follow-through in terms of fundamentals, and in credit had already started to emphasize relative value over absolute, we suspect those with bearish longer-term inclinations may nevertheless feel now is not the time to position for them.

And some words of consolation for those who find themselves once again fighting not just the Fed but all central banks:

The problems investors face are those we have referred to many times: markets being driven more by momentum than by value, and most negatives being extremely long-term in nature (the need for deleveraging; political trends towards deglobalization; a steady erosion of confidence in central banks). Against these, the combination of UK political fudge (and perhaps Italian tiramisu), a lack of near-term catalysts, and overwhelming central bank liquidity risks proving overwhelming – albeit only temporarily.

Why have central banks now completely turned their backs on the long-run just to provide some further near-term comfort? Simple: as Keynes said, in the long-run we are all dead.

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Main_Sequence's picture
Main_Sequence (not verified) Jul 12, 2016 11:08 AM

BUY STAWKS.

Fester's picture

On a long enough timeline...banks will own everything.

BaBaBouy's picture

ANOTHER Term Is Market Manipulation ~~~

Gaius Frakkin' Baltar's picture

"in the long-run we are all dead."

Said the childless faggot Keynes.

JamesBond's picture

Wow.  Didn't know BoJ had billions to burn on American stocks.  Must have a squid tentacle up their ass pushing the buttons....

Manthong's picture

Huh? Who the F was that a mystery to?

N2OJoe's picture

That's why it's in quotes silly.

Save_America1st's picture

"gunfible"?  I dunno what the heck gunfible is, but it sounds like something the gubmint might want to ban. ;-)

Escrava Isaura's picture

The "Mystery" Of Who Is Pushing Stocks To All Time Highs 

 

The "Mystery" Of Who Pushed The Dollar As The Global Reserve Currency

 

The "Mystery" Of Who Created the America Middleclass

 

The "Mystery" Of Why We Have The Lowest Inflation While Spending The Most

 

The "Mystery" Of…………….and I could go on.  

 

Well, these are only mysteries for about 80 percent of the population, because anyone with his head screw on knows that it’s Central Planning/State Capitalism that did that.

 

Now, if you want to embrace the Republican hypocritical doctrine of rugged individualism, you know, go out there and fend for yourself, there are places like that out there, it’s called third World.

 

Good luck making in your own, because it ain’t gonna be pretty.

 

ACES FULL's picture

Are you talking about US or Brazil here? Silly me,we all know how central planning is working for Brazil. Or is the fault of all the rugged individualist Republicans down there? Please don't pretend you didn't see this post.

Escrava Isaura's picture

Brazil was a colony—third world. US is the Empire. You cannot compare Brazil to US.

 

Pickleton's picture

Because doing so causes you to have tantrums, obviously.  Sorry poopy pants, Brazil has never been a US colony or protectorate.  Hell, the US was the first country to recognize Brazilian independence, so....  appear full of shit, you do.

 

autofixer's picture

You missed the fact of the U.S. being a British Colony?  We simply got rid of the Compradores, Meus amigos em Brasil will not.  

RichardParker's picture

Who Is Pushing Stocks To All Time Highs 

QE via CBs is/was not done for altruistic reasons.  The elites are enriching themselves via welfare for the rich.

The "Mystery" Of Who Pushed The Dollar As The Global Reserve Currency

England (with the pound being the most recent WRC before the dollar) "passed the torch to the US"  Take a look at British foreign policy especially in the ME from say 1870? to 1950.  It is strikingly similiar to current US foreign policy.

For example:

http://en.wikipedia.org/wiki/Mosul_Question

http://en.wikipedia.org/wiki/Occupation_of_Constantinople

http://en.wikipedia.org/wiki/British_Mandate_of_Mesopotamia#Early_unrest

http://en.wikipedia.org/wiki/History_of_Egypt_under_the_British

http://en.wikipedia.org/wiki/Sultanate_of_Egypt

http://en.wikipedia.org/wiki/Balfour_Declaration

http://en.wikipedia.org/wiki/Transjordan_%28region%29

http://en.wikipedia.org/wiki/British_Military_Administration_%28Libya%29

http://www.iranicaonline.org/articles/great-britain-iv

http://www.answers.com/topic/britain-and-the-middle-east-from-1914-to-th...

https://en.wikipedia.org/wiki/Sykes%E2%80%93Picot_Agreement

The "Mystery" Of Who Created the America Middleclass

I hope you're not implying FDR...

From Antony Sutton's FDR and Wall Street:

"Roosevelt was a creation of Wall Street, an integral part of the New York banking fraternity, and had the pecuniary interests of the financial establishment very much at heart.

To be specific, Franklin D. Roosevelt was, at one time or another during the 1920s, a vice president of the Fidelity & Deposit Company (120 Broadway); the president of an industry trade association, the American Construction Council (28 West 44th Street); a partner in Roosevelt & O'Connor (120 Broadway); a partner in Marvin, Hooker & Roosevelt (52 Wall Street); the president of United European Investors, Ltd. (7 Pine Street); a director of International Germanic Trust, Inc. (in the Standard Oil Building at 26 Broadway); a director of Consolidated Automatic Merchandising Corporation, a paper organization; a trustee of Georgia Warm Springs Foundation (120 Broadway); a director of American Investigation Corporation (37-39 Pine Street); a director of Sanitary Postage Service Corporation (285 Madison Avenue); the chairman of the General Trust Company (15 Broad Street); a director of Photomaton (551 Fifth Avenue); a director of Mantacal Oil Corporation (Rock Springs, Wyoming); and an incorporator of the Federal International Investment Trust.

The really notable Delano on Wall Street was FDR's "favorite uncle" (according to Elliott Roosevelt), Frederic Adrian Delano (1863-1953)...  In 1914 Woodrow Wilson appointed Uncle Fred to be a member of the Federal Reserve...

Intimate Delano connections with the international banking fraternity are exemplified by a confidential letter from central banker Benjamin Strong to Fred Delano requesting confidential FRB data:16
(Personal)
December 11, 1916
My Dear Fred: Would it be possible for you to send me in strict confidence
the figures obtained by the Comptroller as to holdings of foreign securities
by national banks? I would be a good deal influenced in my opinion in
regard the present situation if I could get hold of these figures, which would
be treated with such confidence as you suggest.
If the time ever comes when you are able to slip away for a week or so for a
bit of a change and rest, why not take a look at Denver and incidentally pay
me a visit? There are a thousand things I would like to talk over with you.
Faithfully yours,
Benjamin Strong
Hon. F. A. Delano
Federal Reserve Board, Washington, D.C."

 The "Mystery" Of Why We Have The Lowest Inflation While Spending The Most

We export our inflation to other countries via exorbinant privelege.

 https://en.wikipedia.org/wiki/Exorbitant_privilege

 

Well, these are only mysteries for about 80 percent of the population...

Outside the US?  I doubt it.

WW1; Wilson; Democrat

WW2; FDR; Democrat

Korean Conflict; Truman; Democrat

Vietnam; LBJ; Democrat

You probably know the rest. LOL

The sooner you see there is no difference between the blue team and the red team, the better off you'll be.

The more accurate term for what you call "Central Planning/State Capitalism" would be Central Planning/State Cronyism/FASCISM

LikeyMikey's picture

WOW!!!    Well said!!!!

 

I think I am gushing here....

Memedada's picture

+ 1.

I don’t, however, see much difference between “state capitalism” and “fascism”. Only in relation to the “fetishism” associated with fascism (the focus on patriotism/nationalism, race, war/heroes, law ‘n order (for the plebs), scapegoating (Muslims, blacks, Hispanics, the poor/FSA, terrorism etc.), cohesive/violent suppression of dissent, surveillance and anti-intellectualism/education).

Fascism is a variant of the more broader category of “state capitalism” – IMHO.

 

Escrava Isaura's picture

U.S. is Central Planning/State Capitalism. You couldn’t have all that you listed on a laissez-faire, where transactions are between localized private parties without government interference such as regulations, privileges, tariffs, and subsidies.

 

America is a byproduct of European imperialism and governance systems, that means, central programming (state control), conformity (religion), nationalism (blindness), and education (indoctrination).

 

America had it good by have been under the British. Central and South America did much worse because the Spaniards and Portugueses only cared about looting both continents.

 

And thanks for the list. I saved it.

 

Pickleton's picture

"America is a byproduct of European imperialism and governance systems,"

 

"America had it good by have been under the British"

 

 

You appear to be COMPLETEY ignorant of American origins.

eclectic syncretist's picture

A license to counterfeit in a world trained for greed is a powerful thing.

medium giraffe's picture

shitgums are gunfible, for example

 

imagine my surprise when I found out who had been buying stawks though

cheka's picture

boj is outpost of nyc.  been that way since ww2

cheka's picture

another slap in the face of the currency war dupes

coordinated market pumping, devaluing, currency swaps, bailouts....again and again

Fish Gone Bad's picture

This is all so they can crash the market after Trump gets elected.  He can then be blamed for the "worst stock market crash ever."

PTR's picture

"I didn't say it was your fault.  I just said that I'm blaming you." -Unknown

bobsmith5's picture

Now that is a distinct possibility, lets just hope that it happens at the very latest this fall so that the NWO shill Obummer gets the blame and therefore causes Trump to be elected in the most massive landslide ever in U.S. politics. You two down voters must be stupid MDB and his multiple accounts again.

Nexus789's picture

Its another massive transfer of wealth to holders of stock. The 1%.

MrSteve's picture

BoJ "printed" yen and then traded them into dollars and stocks rise, like yeast in the dough. All's well until somebody slams the oven door and the bread collapses. Corporation buy-backs load the books with debt, guaranteeing a need for ever cheaper currencies with which to repay long term debt, making government finance and corporate finance neatly alligned to "require" cheap currency. So if the money isn't paying any interest, why not own real assets which also pay no interest but actually do exist, ie: orchards, timberland, lumber yard, farm land, sand banks, rock quarries, fishing tackle, nets, crab pots, boats, various tools, etc.

Ex-MislTech's picture

Billions ??? They got a keyboard they can type in numbers and print up a trillion a year.

 

Ppl call it a pringting press for money, but its just numbers in a computer.

 

Money as paper and coins is about 2% of money supply, maybe less.

any_mouse's picture

And Keynes partied with Alistair Crowley.

Why is Keynes held in high regard by anyone?

Fish Gone Bad's picture

Santa gets a pretty big free ride as well, and he isn't even real.

ParkAveFlasher's picture

Santa trumps Keynes as Claus' system actually transmits goods of real value according to real demand.  I write a letter every year.

tricorn teacup's picture

Best I can figure, neo-Keyensianism supports policies favored by central planners, even when those policies are proven to not deliver the outcome advertised.

remain calm's picture

Total corruption. They are just levitating the markets till Hillary gets elected, to give them cover for the fucking mess they have made. It is a total scam game and sadly the mother fuckers might pull it off.

Chupacabra-322's picture

@ remain,

Absolutely. Operation "Order Out of Chaos" is in full effect. The racial divide wil continue. Next up are the AL CIA duh cells to activate in the US for even more distraction while the Psychopath ELITE attempt to escape.

WWIII Abroad while fighting a Cival War at home.

Clockwork Orange's picture

Why is there never any sort of Class Action Suit of Short-Sellers vs the Fed for manipulation, collusion, market-rigging, nor by American Taxpayers or Citizens for pillaging the Treasury and Debauching the national currency? 

Scuba Steve's picture

It hasnt been for lack of trying from Bill Murphy and Chris Powell of GATA.

Hats off to these 2 and I'd suggest any/every one listen to their words ...

http://gata.org/about

 

ThirteenthFloor's picture

Read the case of Wall Street 17 aka United States vs. Morgan et. al, market manipulation by 17 largest banks. US lost the case after thirty years in court. Bankers outlasted Uncle Sam.

https://en.m.wikipedia.org/wiki/United_States_v._Morgan

The Real Tony's picture

They should have arrested Ben Bernanke and imprisoned him for life or worst. Almost all other countires except America would do this. America is also the country where all the athletes in the olympics are on steroids. Of course if you're on steroids and live outside of America you get banned for life instead of winning a gold medal like the Americans on the juice. The same is true with the FED and bankers. It's a shame Al Capone died he would do a much better job.

bobsmith5's picture

Yes, it's typical for the stock market to go up until the elections is over.  So many are saying this whole house of cards is about to come down.  It seems that all of the prognosticators  under estimate the power of the central bankers to keep things going even with a crisis like Brexit, which should have already brought down this global house of cards. 

But noooooo, here we are with the stocks breaking new highs, while gold and silver get monkey hammered to death, oil up, copper up, all of it makes no sense logically.  The grand illusion survives yet another day.

armageddon addahere's picture

Who died in 1946 before the results of his policies hit the fan.

Scuba Steve's picture

And echoed by the childless faggot Krugman.

http://krugman.blogs.nytimes.com/2007/12/19/about-my-son/?_r=0

I'm starting to sense a pattern, "Only in my lifetime does my theory matter".

Geta rope and rusty ramrod skewers.

CNONC's picture

Are you suggesting he cares not about the future? Who will take care of his pussy?

thinkmoretalkless's picture

I don't know if the Clintons and Soros abide by that....it's the only thing Keynes said I hope is accurate

Kirk2NCC1701's picture

Centrally-planned "Manipulation"?  How can this be?

Are you saying that the Empirical Evidence shows that the West (led by the US Fed) is just like the old Soviet Union was, or just like today's Russia and the Kremlin are accused of being:  Crooked and Self-Dealing?

No wonder they're pissed at them, if they won't let them in on the game of Wealth Transfer.  Oy, vey! They must be dreck, if their money isn't certified as Kosher by our Financial Rabbis in NY and DC.

/s