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Charting The Generational Shift In Equity Risk Appetite
The topic of deteriorating volumes in equity trading has not been far from our thoughts for a few years now but BTIG's Dan Greenhaus has one of the more explicitly clear and sobering charts of this trend today. Whether you see this as a signal of a lack of trust in our capital markets, an investor-class burned by multiple sigma events occurring weekly, an increasingly binary set of scenarios that leave investors clueless, retiring boomers demographically unwinding the 30 year rip, savings draw-downs as income stagnates, or more simply just a generational shift in attitudes towards risk appetite/tolerance; the absolute value of stocks traded is for the first time in a generation diverging rapidly lower as stocks levitate on central bank largesse. It leaves the question: who is the incremental buyer and how sustainable is their presence?
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Between HFT, Corzine, JPM and the useless corrupt regulators, no wonder retail investors have dropped off, since they have nothing left to steal
Feed My Frankenstein
http://youtu.be/NO2cHJmDkBg
When the selling finally happens, that's when we'll see a real crash. There will be no retail suckers to sell to and the insiders won't wait around to sit on losses.
moral of the story, the lines always meet up. spx 800 faster than you think.
From the looks of that chart, if those lines meet up, we may be looking at SPX 500.
They do in a normal world, but as long as the bernank is in play spx 800 slower than you think
The Fed (duh).
Rock solid (very few understand and are incented to fight).
Does anyone even remember stock picking? Individual investors used to use fundamental analysis to decide which stocks to buy or sell, and technical analysis to help decide when to buy or sell. It was pretty cool stuff. There used to be books, seminars, and even investment clubs. Kids would get actual certificates of Disney shares for birthdays. No kidding. Look it up in the history books.
At this point, I cannot imagine there is a fix for this situation that does not include a complete tear down and hopefully a rebuild. We are likely to be living under Central Planning for a long, long, time.
I think that the algos could keep at it forever, until they don't.
Value of traded shares? Is that daily volume X price ...
When Charles Evans takes over for Ben, QE 10 will be to have the Fed buy too big to fail NFLX and RIMM. Government pensions depend on it!
As a newsletter publisher this is something I'm acutely aware of especially in developed markets.
Everyday I ask - who in their right mind is buying this phony, manipulated, propped-up bullshit?
Depends on Brian Sack's replacement ....he "retires" in 2 weeks.
One example: people who just got a job and have their 401k contrib set to a default they didn't choose thus dribbling seven figures in aggregate into the grubby mitts of the sell-side assclowns at Fidelity.
So in otherwords, it looks like the SPX should be around the '09 low, 660 give or take a couple of points. Sounds about right...
How is the "absolute value of stocks traded" defined or calculated?
thank you....i was wondering the same.
Maybe Im missing something but I dont get the absolute value part....
http://www.investopedia.com/terms/a/absolute-value.asp#axzz1xm5lJ4uU
OT - New counterparty risk for caching preppers: vagrants looking for a quick foot wash.
http://www.nydailynews.com/news/national/homeless-man-texas-wins-bag-70-000-cash-gold-article-1.1095442
"The bag contained 70 $100 bills and 40 gold coins known as the Krugerrand"
Alternate headline: "Zero Hedge reader really pissed"
LOL. That guy will be dead from alcohol poisoning within the week. America! Yeah!
Finders (oath)keepers.
Serves em right for putting a cachet for the end times in a high-traffic area and most likely not dividing it into smaller stashes (the alternative being someone who is that dumb, but somehow has multiple millions squirreled away).
If you're going to put $75k in public, maybe a strongbox with a motion alarm and GPS tracker wouldn't be such a bad idea?
Or at least bury it.
“He has the opportunity to make plans and have a real future.”
No. No, he doesn't. Unless his plan is to be arrested again in the real near future.
Other than some gold and silver miners I am completely out of stocks. The rest of my assets have been blown on gold, silver, ammo, guns, and non-perishable foods. ......oh, and some bourbon and pot.
I've lost count of the seeds. I'll make the whiskey too.
http://www.youtube.com/watch?v=BhYgfRWR18c
It's not just the confidence.
I had a conversation with my baby boomer dad and aunt about what they're doing with their retirement funds. They both said they're not about to throw money in stocks at this stage in their lives. They need this money to live off of soon. Now's not the time to put money into something that can lose 30% in a flash.
Then I look at all my friends. I don't think many of them have much savings at all in their late 20s. Most of them just got out of graduate school, paying for weddings, or bought a house. There's just no way they're building capital. And to be honest, my 401k money goes into the money market account. It has a terrible yield, but who cares.
So when it's not just a loss of confidence. It's that the younger generation is not building capital savings. This is the most disturbing part of the depression for people who understand Austrian economics. Capital is being actively destroyed year after year.
most people i know in their twenties and thirties are not saving,they are buying I crack electronics,going to concerts ,dollywood,branson,living check to check like there is nothing wrong with this economy and wonder why everybody is worked up about europe!
"It's that the younger generation is not building capital savings."
Why should they when Benny prolongs his ZIRP policies and you watch your savings decrease in value due to one of their other objectives, inflation?
If a Yute puts $10,000 in his "High Yield Savings Acct" that yields 0.9%, in five years it will be worth less then $8k if you have only 6% inflation. (This does not include taxes, bank fees, etc).
Here is a good calculator:
http://www.culookup.com/Calculators/Savings/TaxesandInflation
"So why save?" the Yute reasons.
Seems like the chart as he currently skews it makes sense. During bubbles the amount of people in the market increases dramatically so volume is higher. Before bubbles volume is lower. According to his chart you'd want to be a buyer right now as when more volume comes in the stock market will soar...
lol wut? You conclude people are about to mad dash into stocks now? How on earth do you figure that? Will it be from the $3,000 checks from ObaMao sends out for 'thingamajiggers'?
Although he conviently leaves out a time axis, he starts supposedly at 1996, the dot com bubble and then we have the mid-2000s bubble. It would have made more sense to show the chart on a longer time period to be able to infer any correlations in these two data items. Also note the classic lying with statistics move of having the 2 y-axes on different scales, wow they move with each other. Not.
I think you can now use food stamps to buy stocks.
Or stocks will plummet to converge with volume.
Who is the buyer? The Central Banks....this is called 'monetizing the debt'.
In 1998, I attended an investing conference in New Orleans where one of the presenters said that generational dynamics would lead to a stock market crash. He said it would happen in waves and would probably start in 2008 or 2012. His presentation was very compelling, but I shrugged it off to get ready for the presentation from the Morningstar CEO.
I think we have found the much vaunted "de-coupling" ....
Ah that ol' nutmeg. Volume, time and price. Most people around here couldnt tell you which indicies were price weighted or capital weighted. Illiquidity in and of itself does not lead to lower values. Ask the PM bulls
Does that volume chart include the algos that buy and sell again in a split second, and that now account for 75% of market volume?
If one were to define the "absolute value" of stocks with some rigor, this chart might mean something.
The SP500 has either completed Primary wave 2 up or is completing it.
At any degree, wave 2 up typically ends in anaemic volume. This can be seen at most/all major tops.
http://bullandbearmash.com/index/sp-500/weekly/
Let the selloff commence.
Govt pension plans will be the incremental buyer. Corporations will be socialized when it is politically infeasible for govts to directly fund the big payouts to the public sector. The unions have always been part of the elite and they will own the cash flowing entities and the independently wealthy will own the PMs.
Rally warning continues...
Despite stockbears with their pre-election jitters, SPX choppy bullish daily & USDX bearish daily charts strengthen.
Significant equity / EURUSD upside & USDX retracement ahead.
http://www.zerohedge.com/news/2012-12-24/market-analysis