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From All-In To All-Out: Are Macro Hedge Funds The Canary In The Stockmine?
The question of who was the marginal buyer of equities in mid February and into March appears to have been answered. It was Macro hedge funds whose correlation of returns to the S&P 500 went from a negative 0.58 on 2/15 to a very high positive 0.75. It would appear that macro funds, just as they did in Q1 of 2011, went all-in. However, just as occurred in Q1/Q2 2011, the ebbing macro backdrop of the last few weeks, as evidenced by the Citi Economic Surprise Index tumbling rapidly, appears to have stymied their risk appetite and, again just as in 2011, as the surprise index rolled over, so Macro funds started to exit the equity market very rapidly. In fact, in the last two weeks the 30-day correlation between the Macro hedge fund return index (HFRXM) and the S&P 500 (SPX) has crashed back from +0.75 to -0.55 currently as macro funds clearly shift to a negative stance of US equities in general - selling into the momentum strength of the last few weeks. As we pointed out a week ago, institutions were indeed all-in, but it seems the reality of recent macro data and European risk flares is perhaps rapidly darkening the rose-colored lens with macro-funds the first to flee.
The dark-red line is a smoothed average of the 30-day correlation between Macro hedge fund and S&P 500 performance and tends to turn (with a lag) with US Macro data surprises (positively and negatively). The light red line is the actual correlation and as the green and red arrows show it has plunged in the last week or two - just as it did in 2011 - following a rollover in the ECO surprise index...
Chart: Bloomberg
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LOL, yea, sure.
The hedge funds want to make their money. The only way is to sell overpriced equities. Trying to sell they come across a big problem, no retail customers to dump their overpriced shares upon. Mmmmmm.
Thus Ben provides non-recourse non-collateral back zero interest 'loans' to the primary dealers who are more that happy to buy whatever anybody is selling and even over bid for it.
Please. Stop it.
You stop it! You No Crash blasphemer!
There is a Market out there and it is rational!!
Bens actions are only a 1 sided equation, all worthless unless they can pass it off to someone else, and theyre facing a real world nightmare of retail nowhere to be seen.
Hedge funds can still rip off the sheeple selling their overpriced equities to retirement funds and 401k mutual fund suckers...
Yes ... they killed fiduciary responsibility years ago. Betting on Ben is not only fashionable it can be done without recourse.
Just got an analyst report from a TBTF bank today: expects rally to continue into May-June without significant pull-back. No reason given except that the "consolidation phase" is over.
Listed companies were big-time buyers of their own shares in the past 3 months. If you think they are discerning when it comes to price paid, you are mistaken.
WB7's scratch pad?
That chart is busier than a one-legged banker at a muppet-kickin' contest.
I'll believe the next equities crash when I see it happening...other than that its all-in to support their precious little equity markets at all costs day after day.
Cue-Bald Bennie... Just push <PRINT>...
Jamie & Lloyd... Just take the free cash and speculate... Then push <BANKSTER><BONUS>...
SD1... they really are at red alert level to reel in the retail suckers ASAP or come begging for more ponzi cash from BEnron... they have no suckers to sell to at this time but that time is almost up!! The run for the exits will be so quick and furious even BEnron won't be able to warm up the printers fast enough!!
The funny thing is that while most preppers are waiting for a sudden doom event to come screaming "i am here!" the whole doom thing is happening in slow motion... only a matter of time before the wheels come off as TPTB think they have everything under control...
S&P 1300... Come on retail suckers!
S&P 1400... COME ON RETAIL SUCKERS!!
I love how the futures took a dive off a cliff this morning but somehow magically halted abruptly at 1,400 ES.
Yea, this is way way beyond absolutely ridiculous now. Like the 3 card monte stooge on the street that keeps guessing the right walnut shell and 'wins' huge money. Maybe THIS will get someone to step up and play.
The syndicate is not going to close the market red on the first day of Q2. No way. That would destroy a vital illusion.
Exactly, their ONLY course now is to troll higher for retail suckers to pass off the pump to when they werent buying at DOW 10,000? They have a massive PROBLEM here!
stocks,bonds, commods up........everything up. so fucking orderly. everything ive thought true about finance is being tossed in the shitter. i need a psychiatrist
You need a psychiatrist like The Bernank needs another PhD in Economics...
You understand it perfectly... The financial oligarchy that own us are insane criminals...
turned on cnbc this morning --dow down 70; its been ticking up so uniformly every minute since. i said that i would turn it off when there were 2 down ticks in a row on the tape. 3.5 hours later haven't seen 2 down ticks in a row. and i had to listen to those fuckers tell me how right they all are. for how vilified i was in 2008 i am being tortured here again in 2012.
the search for yield.........this is crazy.............if stocks are such a great investment why arent bonds being dumped in masse yielding a lousy 2% for 10 years? why the fuck are 5 and 10 year TIPS yields negative.....you'd think the stock market was crashing. I need some medication or to drink more.
why the fuck couldn't the powers that be let deflation take its much need course in 2008? in 2008 the system was actually salvagable. what has been done since is the 'live for today' insanity that is so fucking selfish its criminal. i apologize to young people of what my generation has done to their future.
My son is ten. We go to the coin shop stogether. He manages the inventory.
Can't have that! A bankster might have had a reduced bonus!
We would probably crap our pants if we knew the true dollar extent of the manipulation.
Yes. Why should the all-in big funds sell or want to bring on a crash? While they'd rather have the markets continue to go up, isn't keeping them at the levels they are better than having them go lower?
We need to bid these things up people
Larry - don't do it for them; do it for YOU.
You have to play to win!!
'US Economic Surprise Index'....wtf....like playing peekaboo with a little baby....surprised no matter how many times in a row you cover and uncover your eyes.
I have old clients calling me up asking "what the hell is going on" and where should they put their money. I tell them stay away from the ponzi stock markets, sell everything that is paper and buy everything that is tangible. Then I tell them what a bird told a dog the other day... "We can keep this [system] going for another 10 years, perhaps 15 years or longer at the current rate. It really is dependent on the dollar's reserve status, but we have that under control." By "system" they mean the fiat ponzi system that allows them to print money out of thin air and keep the illusion of growth going...
The US will keep on trucking longer than rest of us realize. Here is why. Europe, Japan and China are all about ready to implode. Cash will flee those assets to be invested in the last man standing, the US. Yes, even as we face fiscal nightmares the end game will be extended beyond rest of the world.
That's what I learned at TheAutomaticEarth.org
I hope you are right. But just because everyone else crashes, doesnt guarantee cash is going to rush to the U.S. Perhaps the grand illusion comes crashing down for everyone.
What do you think would happen if we had another Hank Paulson moment right now ?
If it is just me and the Berank still in then so be it. FB goes public in May think about it. GS the Bernank and me the only ones in the market. That is why Joe Sixpack has to double as a plumber. He doesn't know when to be in the market and when not to be.
Oh right...that's why stocks are going straight up...because everybody is getting out of stocks.
huh?
Deutsche Boerse yoy -23%
Equities trading 25% less and the DAX marching higher. Today was ugly before the US opened.
http://www.handelsblatt.com/unternehmen/handel-dienstleister/maerz-bilan...
Sure that's indicative of the rest of Europe.
25% LESS compared to 2011 is a death sentence for the market. Nobody is "in" and therefore nobody needs to get "out". This market is purely fictional for the purpose of entertainment and propaganda. The paper "wealth" the markets represent is just as much full of bullshit as the bank's foreclosed real estate portfolio on their balance sheet.
NONE OF IT IS REAL
agreed walkure. Don't think anything will happen till after the election. TPTB decide when to pull the plug. Wouldn't surprise me in the least if the derivatives take down the market towards the end of the year. But what do i know.....gives me a little more time to get more prepared.
Bunch of beer drinking sausage eating fat lazy fucks over there. They don't know nothing about exploiting other countries. They probably haven't even moved the gold out of Greece yet. And where's their gold. At the NYFed. Ha. Serves them right.
Correct. 2008 was when the whole game changed and everyone saw the hand move the cards!
Sure... you can "invest" in the ponzi market and might make money as it goes UP AND UP AND AWAY as inflation hits BUT who wants to be the last man holding the bag when the music really stops. NOT A SOUL knows WHEN that music stops! NOT EVEN BENRON!!
What stocks are higher in April 2012 than they were in April 2011? And even if there are one or two stocks which have made a run since last year, chances are the rest of the portfolio is in the crapper. Buy & hold is bullshit. Trading is a crap shoot. The "lucky" ones may come out 5% ahead at the end of the year. Was looking at some of the hedge fund performances. Particularly those that claim to have had 300% or better returns. Even if that was legitimate, what underlying sector or what commodity would have produced this yield? That's the whole problem with our financial systems. The returns for some groups are fantastic as in pure fantasy! If technically speaking a financial product can deliver this return, on what amounts can the system muster and sustain returns like that before it collapses?
real?
not exactly, but it is spend-ible!
just cash out, pay the silent majPartner, and everything left is yours
then, you can buy whatever floats yer boat!
stop worrying! who tf cares what the DAX is or whether we're above or below the mean, average temperature in NY, london, paris, or some quaint mountain retreat for convicted priests, since records were kept?
prices and the weather may both be quite different tomorrow; even for priests
who knows?
you think someone would lie to you about the weather? historically V present trands?
now, really! lie to you about the weather? have you considered talking to someone about this? i'm sure it wouldn't take more than 40-50 years to get to the bottom of it...
And that's just that. They print themselves the neverending paycheque and we have to live with the consequences of a worthless currency we're forced to use. When their shit hits our fan, they're hiding behind their firewall of political whores.
Now in the case of the exchanges, there is a recorded drop of 25% volume, participation, trading or whatever they want to call it.
How long is a business viable that's declined 25% yoy? And what if that business is in the business of recording the equity trading of all major businesses?
Why bother watching "Hunger Games" when you're going to witness ENDGAMES live, uncut, uncensored and right before your own house.
yes, according to legal tender laws, all globalComrades are required to accept debt payment in fiat, and full-price offers of fiat, if it really does come to that
i've been watching "endgames" certainly since 1971; every fuking day, too, walk! taking down the banking laws, and blowing and re-blowing thing up, over and over till it's just finiMinis in clown cars and fungibility, world-wide
and PMs and... legal tender for goods offered for "cash" and debt payments
even if the currency should fail, new legal tender will just "fix" it; and people might have more hopium, too!
new bonds, discounted to new tranches of asymptotal avalanches and new "elastic" chip-implanted "money"! everyone will feel so...e-volved!
last year, tyler put up hiFreek order filling for a under-100k-market order and and what the customer "bought" was an expensive shake-down by a psychosis with a trading floor
it is a bucket shop/casino, walk! people can bet and then win or lose; it's so eZ! and fun! why stop?
See, there is one big thing we are all overlooking.
This country is being "TRANSFORMED", into a quasi socialist society ala Europe and their failed "Fabian Socialist Society" model!
Obummer is a student of Saul Alinsky and Cloward & Piven, these two mindsets are all about "Collapse the System",(capitalism, think O.W.S.) and replace it with "Fairness and Social Justice" that in decades past were PROGRESSIVE keywords for Communism!
If you think this is a joke or some kind of perverted goof, get your heads out of your proverbial arses and WAKE UP AMERICA!
This has been going on since the scumbag of all scumbag Presidents Woodrow Wilson, then you get the grand wizard of the progressive party to kill God and the Constituion, revisionist history and the birth of the "Government knows best", F.D.R!
Is it any wonder after Johnson and his "ABORTION", The Great Society, we got Jimmy Carter and BOZO Clinton?
Clinton was the "COOL" president, blowin' his sax and perverting the establishment, don't forget he was the one who introduced Obummer to the Masses and crowned him king of the Progressive Movement!
This is the endgame of our once proud society, we are now a country ruled by the "Laws of Man." This country, up until Obummer, was ruled by the founding fathers principles and the "Laws of God"!
Man,(Obama) and his "Social Justice", "Collective Salvation" are nothing more than the culmination of 100 plus years of getting rid of America's proud traditions and belief in "Hard work equals a shot at the American dream", you think Bernanke / Geithner and an irrelevant congress have the balls to stand up for the American way of life?
Hell no! They are complicit!
When you see people watching and encouraging some morons,even women to beat the shit out of each other while they video tape it for youtube, you know we are not a virtuous people anymore. Have the progressives won?
I think not, but it will not be easy folk's! Look inward, find your moral center and get this garbage out of your lives and the future of our countries destiny.Our children! It is the prize the progressives value among all else.
As Al Gore has preached to school children,"There are things you know, that your parents don't know", its all about the indoctrination of our children.
May the good lord watch over this fragile little experiment in freedom / man's self rule we call America!
God Bless The Virtuous
Jerry
How does Wall Street greed, corruption and manipulation factor into Alinsky, Cloward&Piven? It's gotten worse since Obama, or not? Maybe Obama is using the Fed and Wall Street greed FOR his socialist agenda to blow up the collective balance sheets faster?
how?
wallSt doesn't "factor" except to sell the rallies and BTFDs, with three derivative dimensions either way, too, imo
we're booked into the fungibilitySuiteDeluxe, BiCheZ!
and they seem to have bolted the door from the outside; and bricked in all the windows....
look! a TV!
so .. are you saying Obama DOES or DOES NOT kiss Wall Street's asses?
i saw some of this around this weekend, walk, and maybe you did, too:
chain of "command"
but also the WWF-type "who is stronger?; who would/will win?; my father was a captain and yours was a sergeant so my dad could tell yer dad what to do; Ha!"
what about superman against anybody?
we need superman ex machina; thus spake slewie
but to answer your simple Q, maybe it always isn't the same, relationship-wize, since there isn't any "chart"
the husband gets what he wants; the next day, the child gets what she wants; after that, it's theMother for, like, 2 years,...; ...then,...
But Obama needs another 4 years first - if elected - his gloves come off
Hmmm are banks nervours? Every other dang day I get a letter from some bank begging me to open a checking account with them. Whasa'matter boys, nobody hava the money for checking accounts anymore? Are the retail customers you have left just keeping enough in their checking and savings account to be able to claim they have one, hmmmmm? So the powers that be want people to buy stocks. Ignore those empty stores at the mall, pay no attention to those people diving dumpsters, watch the price of food and fuel go through the roof, see the MSM reveal themselves as lying scum.
Flies to spiders, thanks we'll just stand out here and watch.