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"Dumb Money" Refuses To Be The Dumb Money For Yet Another Week

Tyler Durden's picture




 

Goldman screams it is a generational buy, Larry Fink goes all in stocks, Notorious BIGGS is 90% long, anchors on comedy-financial fusion channels are channeling the producer in their earpiece and screaming at the teleprompter to "sell bonds and buy stocks", even as stocks are at their highest in nearly 5 years and... what happens? In the latest week, ICI just reported that domestic equity retail funds just saw another $2.9 billion outflow, the 4th consecutive in a row, and the 23 of out 27 outflows during the entire parabolic blow off top phase the market has undergone since October, and instead put another $9 billion in fixed income funds "soaring" yields be damned. What does this mean? Probably that the stock ramp is about to get uber-parabolic for the simple reason that this is the only thing left in the status quo's arsenal - to keep doing the same old same old, hoping for a different outcome, because this time it's different. Only this time the dumb money either doesn't have the cash to burn, or just doesn't want to participate in a rigged, corrupt, centrally-planned market. Whatever the case, the Primary Dealers and the Fed will just have to keep hoping more central banks pull a Bank of Israel and sell the hot grenade axes to them, since Joe Sixpack is done being the "dumb money."

 

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Wed, 03/21/2012 - 16:22 | 2277666 monopoly
monopoly's picture

Market moving higher on fumes. But it can last a lot longer than we think.  And notice the tiny downer on AAPL today. Hmmm.

Wed, 03/21/2012 - 17:34 | 2277910 ACP
ACP's picture

I'm just waiting for the Fed to be wired directly into the exchanges so they can have complete control of prices and who is allowed to buy/sell.

Wed, 03/21/2012 - 17:50 | 2277953 Bartanist
Bartanist's picture

They already are. Look up who the DTCC is, what their function is and who owns them.

Wed, 03/21/2012 - 20:19 | 2278465 buckethead
buckethead's picture

http://www.dtcc.com/about/governance/board.php

 

http://www.dtcc.com/about/business/customers.php

DTCC's customer base extends to thousands of companies within the global financial services industry. DTCC serves brokers, dealers, institutional investors, banks, trust companies, mutual fund companies, insurance carriers, hedge funds and other financial intermediaries - either directly or through correspondent relationships. Increasingly, DTCC's customers operate both in the U.S. and overseas, where DTCC continues to provide them with services.

In the U.S., DTCC provides critical services to the markets for U.S. Government and mortgage-backed securities, and to all U.S. equity marketplaces, including the New York Stock Exchange, The Nasdaq Stock Market, the American Stock Exchange, and regional U.S. markets, as well as electronic trading and communications networks (ECNs).

 

???

Wed, 03/21/2012 - 21:25 | 2278660 ndotken
ndotken's picture

My profit is locked in because every day I just keep raising the strike price on my APPL STOP order.  

Wed, 03/21/2012 - 22:52 | 2278901 rocker
rocker's picture

Here, here for You.  Seems like a great plan.  Is your stop low enough to cover the 20 dollar swings? Must be.  I might even think of trying it.

My take is this. Commodity stocks are beat up and the hedge funds are still beating on them. Without them. I do not want anything.

Excluding "OIL"  the rest are dirt.  Even though many are being consumed faster than above ground supplies.

What does Dr. Market have to say about that.  We build motors out of aluminum instead of steal.  Super Poor for those high heat fuel injected monsters.

Can you say WARP drive or Warped Motor.  Almost seems like a plan.  When I see basic mineral stocks going down, down, down. 

I am not a believer.  Even the white metals are failing.  And unless there is demand for them vs. above ground supplies.  I buy nothing.

Without a good foundation. The market is a farce.   If I see the whites go up. I can believe.  Without that demand, it's a bull trap.

Wed, 03/21/2012 - 17:58 | 2277969 Winston Churchill
Winston Churchill's picture

With this rate of investor participation in th 'market' you could run that system on the old Apple IIe.

Very ironic.

Wed, 03/21/2012 - 19:46 | 2278309 iamgogi
iamgogi's picture

This "Muppet" revolt will not stand. Must be put down. I will set interest rates to -.25. Should work.

- Ben

Wed, 03/21/2012 - 20:51 | 2278570 Buck Johnson
Buck Johnson's picture

They are trying to keep the market and economy looking nice until after the elections, and it won't work.  This market and the economy wants to burst and go down hard and Obama is afraid of it happening.  Just look at what happened to Bush the second, even though it was his second term he couldn't keep what was happening from happening during an election.  And Obama is fighting for his life for votes and he needs the market to stay nice.

Wed, 03/21/2012 - 21:09 | 2278615 dzyd
dzyd's picture

Can someone answer me -  Is AAPL the most massively overbought large cap stock of all time? TIA

Wed, 03/21/2012 - 16:21 | 2277668 ekm
ekm's picture

I don't think their intelligence has changed much. I just think they are getting old and their liabilities (house price and credit cards) exceed their assets (house) and they are getting older and older.

They just can't be dumb any longer even if they wanted to dumb down.

Wed, 03/21/2012 - 18:17 | 2278024 mendigo
mendigo's picture

Bernanke built it; they will come as they must. But for a little while they will remember - will be less dumb.
Could be the setup for epic event.
The market is dead man walking and Dr bernankenstein and his minions have everything under control. How long can this thing maintain - 3 months or 3 years. The problem with Tylers analyses is I think he underestimates thier willingness to trash everything and every one to maintain thier status. Give them what they want 2x.

Wed, 03/21/2012 - 16:22 | 2277669 TooBearish
TooBearish's picture

Until ETF flows are netted into this line of reasoning it will continue to make no sense at all....

Wed, 03/21/2012 - 17:09 | 2277830 Tyler Durden
Tyler Durden's picture

From a recent ConvergEx report: nobody appears to like domestic equities very much... Except for Apple of course. But we already know all about the NASDAPPLE.

Wed, 03/21/2012 - 17:19 | 2277849 LawsofPhysics
LawsofPhysics's picture

Vanguard has a lot of state pensions.  When that bubble pops, I might expect some shooting to start.

Wed, 03/21/2012 - 20:41 | 2278535 derek_vineyard
derek_vineyard's picture

Inflationary deflation

Everything we consume costs more ... every capital asset we own is worth less

Seems like most everyone is waiting for stock market to get crushed-----hurry up already

Wed, 03/21/2012 - 16:22 | 2277670 Cdad
Cdad's picture

Joe Six Pack AGAIN...selling into strength and kickin' ass, bitchez!

Wed, 03/21/2012 - 16:23 | 2277672 LawsofPhysics
LawsofPhysics's picture

Wait a minute, "Joe six pack" has money?

Wed, 03/21/2012 - 17:16 | 2277843 HD
HD's picture

Yup. Joe found 35 cents in the washing machine and a couple of quarters under the couch cushions. Living large is back in the land of milk and honey.

Wed, 03/21/2012 - 16:25 | 2277677 Pete15
Pete15's picture

Time for bonds and cash until the crash is over with, FED must print then into hard assets. Easy enough.

Wed, 03/21/2012 - 16:25 | 2277682 TradingJoe
TradingJoe's picture

Me like "dumb money" being smart for once! They sell as the market gets higher because they all sat on loses for so long now and just want to get out! Which is commendable, given valuations and levels of gov intervention...ahm...manipulation!

No one will be sucked in this FEDster induced, slowly dwindeling "liquidity", algos can keep playing ping pong wiht each other and then finally canibalize one another for good, i'll be watching in delight!...AND SHORT THE SHIT OUT OF EVERYTHING MOVING :)))

Wed, 03/21/2012 - 16:27 | 2277684 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Great chart, I love how retail can be counted on to be consistently wrong. It's the only business in the world where people do not buy when things are on sale.

Wed, 03/21/2012 - 16:33 | 2277704 LawsofPhysics
LawsofPhysics's picture

Price it however you like, if there are no real buyers (a.k.a. no demand) do it really matter?  I don't consider companies buying their own stock or the Fed, or the primary dealers real buyers, do you?

Wed, 03/21/2012 - 16:37 | 2277721 ekm
ekm's picture

The answer is yes, they are real buyers until the weakest link ends up like Bear Stearns, Lehman and very recently MF Global.

I'm saying Merryll Lynch is the next in line. Let's see.

Wed, 03/21/2012 - 17:05 | 2277780 LawsofPhysics
LawsofPhysics's picture

That is a fair call, where do you see Morgan Stanley?  I have always said it won't interesting until all the insiders start eating each other.  At some point though you have exponentially more entities/corporation/banks/governments holding exponentially more bad paper promised to each other that has no purchasing power.  Do you really think 707 trillion dollars in CDS is real?  No fucking way.  Once it is decided who is really "in the club" and who is not.  All these entities will have to look at each other and say "call it even".  If they don't, we get WWIII.  Either way, paper burns, period. Same as it ever was, hedge accordingly.

Wed, 03/21/2012 - 16:28 | 2277686 ffart
ffart's picture

Why do retail investors need to be in this market anymore? The Fed can just set the S&P to whatever they want and we'll all reap the benefits.

Wed, 03/21/2012 - 16:31 | 2277692 Sudden Debt
Sudden Debt's picture

Maybe for the short squeeze when the FED tries to buy the last remaining shares on the market that's not yet on their books?

Wed, 03/21/2012 - 16:35 | 2277710 ffart
ffart's picture

Can't have a short squeeze without shorts. And you can't have a crash if noone's buying at the margins. I guess that means S&P [0,infinity]?

Wed, 03/21/2012 - 16:36 | 2277717 ffart
ffart's picture

Hey wait I get it, the Fed can trade S&P shares between their NY office and their offshore shell corporations. That's what I call.... an economic circle jerk!

Wed, 03/21/2012 - 16:58 | 2277786 LawsofPhysics
LawsofPhysics's picture

Yes, essentially front running themselves creating exponentially more paper with exponentially less purchasing power.  A good gig, if you can get it.

Wed, 03/21/2012 - 16:56 | 2277778 prodigious_idea
prodigious_idea's picture

Short interest (aggregate) has been declining, which will make the absence of a retail investor that much more problematic.

Wed, 03/21/2012 - 16:33 | 2277700 Cdad
Cdad's picture

Why do retail investors need to be in this market anymore?

It is called capital formation.  It matters.  Without it, eventually, the wheel falls off the wheelbarrow being used to haul dollars down to the Pigly Wiggly to buy a loaf of bread.

Wed, 03/21/2012 - 16:36 | 2277720 centerline
centerline's picture

Capital formation?  What's that?  Isn't that something the government does?

 

/sarc

Wed, 03/21/2012 - 17:30 | 2277895 MachoMan
MachoMan's picture

We took the concept and rudimentary bases of capital formation out back and put them out of their misery...  and then fed them to the pigs...

The mechanisms used to keep the economy afloat run opposite of the forces that create and maintain capital.  It's THE governor on the system and ultimately the gravity that the donkeys are fighting against...  kind of odd really...  sort of like a rocket that has a lot of fuel, gets into the air, but can't really keep up escape velocity...  hovering until losing the battle with gravity.

Wed, 03/21/2012 - 21:31 | 2278676 StychoKiller
StychoKiller's picture

Well, if all the freeloaders would just get off and flap their arms...

Wed, 03/21/2012 - 18:08 | 2278001 cooperbry
cooperbry's picture

Thanks for the chuckle. :D

Wed, 03/21/2012 - 18:03 | 2277983 ffart
ffart's picture

How do "investors" provide "capital" to corporations by transferring infinitely dilutable currency into infinitely dilutable stock certificates? At this point isn't the only thing that provides capital the willingness of banks to lend? 

Wed, 03/21/2012 - 16:29 | 2277689 Sudden Debt
Sudden Debt's picture

Laudinum, the drink for investors!

Wed, 03/21/2012 - 16:33 | 2277698 breakyoself
breakyoself's picture

It's just a matter of time before the analysts and Jamie Dimons of the world begin to appear on live television and curse us retail investors, AKA muppets, for not doing our civic duty by buying the garbage they are trying to unload.

Wed, 03/21/2012 - 16:37 | 2277723 Cdad
Cdad's picture

Larry Fink made just such an appearance back in October, declaring that through more easy money policies, the Fed should "make them buy equities."  I posted about his comment back then, including that the BlowHorn [CNBC] had edited that specific comment out of their replays throughout the day...but no one seemed to care about it.  Fink, of course, would later go on to say "people should be 100% in equities", which was followed in less than 24 hours by dislosure that he had sold $35 million dollars woth of BLK stock.

So as to your suggestion, it has already happened.

Wed, 03/21/2012 - 23:12 | 2278993 rocker
rocker's picture

Take note, Larry Fink is a salesman for his own business. Being the largest holder of equities of any fund manager.  

Wed, 03/21/2012 - 16:36 | 2277718 Negro Primero
Negro Primero's picture

"Rollover"....'ring, ring' ...it's over: @1:42:18

http://www.youtube.com/watch?v=RDWWENGUhO4

Wed, 03/21/2012 - 16:39 | 2277725 Cheiro
Cheiro's picture

Where do ETFs fit into all of this? Are equity ETF's cannibalizing equity mutual funds. Or is it all just going out of equity funds into bonds?

Wed, 03/21/2012 - 17:48 | 2277949 Bartanist
Bartanist's picture

Pretty sure most ETF are just tracking bets run by the banks. They don't really own any equity. From that perspective the are cannibalizing the market for real equities (all of which are actually owned by the Fed through the DTCC... so ALL equities are just a scam anyway because there is no real ownership ... just purchasing the right to be a beneficiary if the Fed decides to continuing to honor those right ... which it has given itself the legal right to cancel at any time with no repercussions ... sound fair?)

Wed, 03/21/2012 - 16:44 | 2277741 thedrickster
thedrickster's picture

Meet the new Ponzi Vigilante! Joe Craftbeer Sixpack.

Wed, 03/21/2012 - 16:47 | 2277753 Shleprock
Shleprock's picture

I can't afford a friggin six-pack!!

Wed, 03/21/2012 - 16:48 | 2277759 prodigious_idea
prodigious_idea's picture

The first wave of baby boomers are retiring.  An aging population, coupled with the brutal beating that equity investors have experienced the last few years, may be enough to keep the retail investor from entering the equity markets.  Regardless, it must be a real quandary for investment advisors whose clients are following the advice they've always received about reducing their "risk" as they age.

Wed, 03/21/2012 - 19:20 | 2278210 MarcusLCrassus
MarcusLCrassus's picture

It will be interesting to see how they deal with this.  Will the algos keep pushing the market higher on this low volume, playing footsie with anyone sitting on the sidelines? 

Or will TPTB sell all their shares first and then let the market tumble before the first big wave of Baby Boomer retirement pullouts begin?  It would be funny to see the Baby Boomers out there with the OWS folks protesting the corruption.   

 

Wed, 03/21/2012 - 16:55 | 2277775 I should be working
I should be working's picture

And yet the market keeps going higher? Go figure.

How can this be a generational buy? Fair value for the S&P 500 is 1200 at best.

Wed, 03/21/2012 - 17:00 | 2277791 LawsofPhysics
LawsofPhysics's picture

True price discovery has not been allowed for 20+ years now.

Wed, 03/21/2012 - 17:02 | 2277800 Cult of Criminality
Cult of Criminality's picture

And perhaps they(Joe Sixpack) know about Goldmans Knife set or reverse psychology

Wed, 03/21/2012 - 17:15 | 2277841 Pancho Villa
Pancho Villa's picture

Goldman screams it is a generational buy, Larry Fink goes all in stocks, Notorious BIGGS is 90% long,

Yeah, ok. But what does Jim Cramer think?

\sarc

Wed, 03/21/2012 - 17:16 | 2277842 Cult of Criminality
Cult of Criminality's picture

Fink, thats funny all in !

Biggs.............. nevermind ..................Rofl

Tyler, you make me laugh all the time...Thanks

Im still waiting for the milking to end so I can get more dumb Silver and dumb Gold money,lead for um, sinkers and brass for ummm,...candle holders yea thats right dumb and dumber.

Here hold my beer watch this...see this button ? all I have to do is touch it and Bing the next fiat that stocks will not see is morphed into metal

so easy an imbecile can do it...taste great,more fullfilling

Cheers All

Wed, 03/21/2012 - 17:19 | 2277850 There ya go again.
There ya go again.'s picture

Fool me once, shame on you........  fool me twice , shame on me ...............

Wed, 03/21/2012 - 17:20 | 2277860 HD
HD's picture

"anchors on comedy-financial fusion channels are channeling the producer in their earpiece and screaming at the teleprompter to "sell bonds and buy stocks"

You can see it in their body language and sudden reactions every so often when the narrative isn't bullish enough and someone starts barking in their ear.

Wed, 03/21/2012 - 17:23 | 2277868 Biff Malibu
Biff Malibu's picture

Joe Sixpack will ALWAYS be the dumb money...by definition...

Wed, 03/21/2012 - 17:40 | 2277922 Bartanist
Bartanist's picture

I disagree. Joe sixpack will be the dumb money only when he believes that the market is fair, free and honest. Since the stock markets BY DEFINITION are not fair, free and honest, the dumb money becomes those who continue to buy the market with full understanding that they have no chance of ever unloading their shares on a greater fool.

For example: the IPO laddering game is now declared officially dead.

Wed, 03/21/2012 - 20:12 | 2278434 Waterfallsparkles
Waterfallsparkles's picture

Hate to tell you this but Joe Six Pack is unemployed.  All of the Manufacturing Jobs are over seas.  He has no Money to put into a Retirement plan.

Wed, 03/21/2012 - 17:25 | 2277876 Biff Malibu
Biff Malibu's picture

I really miss the late 90's near panic attack Maria Fartaroma bits on CNBC prior to market open with the loudly building music made me always want to jump in and buy some Lycos and Inktomi and Netscape with both barrels blazing!

Wed, 03/21/2012 - 17:28 | 2277886 gwar5
gwar5's picture

Blankfein: The Muppets are revolting!

Dimon: ... and they're not doing what we expected, either. 

Wed, 03/21/2012 - 17:34 | 2277907 barroter
barroter's picture

Dumb money learned a few things. When your hand gets burned, you tend not to stick it back into the fire.  No amount of persuasion will thwart you from what you have personally learned to be true to you.  Wall St deserves it.  They f'ed over people so bad, they aren't returning. 

Wed, 03/21/2012 - 17:46 | 2277941 Scalaris
Scalaris's picture

 

It's one month 'till May anyway and the easy money have been made during the December - February "surprise" rally. 

April to September markets are dead, strangely and fortunately coinciding with the 100% focus on the dismal and worldwide economic foundations which contribute to the overall bear validation vis-a-vis realism, until October - November when the "crucial" nth meeting of some political body reaches culmination and after a "final" decision, hordes of liquidity are being pumped into the pipes which levitate risk until the next April, when of course "bear again" comments begin to resurface and sow "doubt", through the bullish delirium of the rally.

And regurgitate.

Plus Goldman's + Barton Biggs calling long should be a compulsory short call - period (.) . Isn't there an ETF for this trade anyway?

Wed, 03/21/2012 - 18:38 | 2278083 devo
devo's picture

QE3 in June after a brutal April/May.

Wed, 03/21/2012 - 20:00 | 2278383 mendigo
mendigo's picture

But will the Fed take a break in May?
Low volume is best time to turn the knobs.

Wed, 03/21/2012 - 22:57 | 2278922 PC Load Letter
PC Load Letter's picture

It should be FGS

Wed, 03/21/2012 - 18:06 | 2277987 devo
devo's picture

I'm a retail investor, and I'd consider the DOW around 8500. I do think there are a few good value stocks being overlooked right now (e.g. VOD is fairly recession proof, and $26 last week was a decent buy). I also think there are some good long term buys (e.g. natural gas). Gold stocks will get a bump pretty soon, too, so that's a possible trade. 90% of stocks are overpriced when you factor in all variables, so if it's truly just hedge funds buying they're going to be toast when the unemployment checks slowly dry up over the next for months and they come to the realization nobody has a job, and those who do are temps not earning a living wage. April earning season is gonna be ugly.

Thu, 03/22/2012 - 14:30 | 2281235 devo
devo's picture

I must say, I love that VOD at 26.06 purchase---Goldmach Sachs upgrade, thanks fellas.

Wed, 03/21/2012 - 18:15 | 2278021 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Finally the muppets sold an up move.  Way to go muppets!

Wed, 03/21/2012 - 19:38 | 2278285 rsnoble
rsnoble's picture

Markets=big pile of horseshit and now almost  EVERYONE knows it. That's a huge problem for them.  You only get fucked in the ass so many times before you realize this just isn't right. No offense to the minorities around here it was the first thing that came to my drunken mind.  And no.....that's the answer so don't ask.

Wed, 03/21/2012 - 20:23 | 2278479 devo
devo's picture

Once Apple crashes we're going to have to hear about Facebook for months. Could turn the Nasdaq into another bubble.

Wed, 03/21/2012 - 22:13 | 2278786 Curt W
Curt W's picture

After rent, groceries, and gas I have $13.87 left over.

What should I buy ?  Ready to go all-in

Wed, 03/21/2012 - 22:26 | 2278831 devo
devo's picture

A one man tent and a chicken.

Fri, 03/23/2012 - 08:37 | 2282945 wonderatitall
wonderatitall's picture

buy konyobamamerica...or get yourself to a gulag near you

Mon, 04/02/2012 - 13:25 | 2310019 pkea
pkea's picture

It's all too reminiscent of 1929 on the last leg. Look forward to this October

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