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Equity Trading Volume Collapse Bodes Badly For Banks

Submitted by Tyler Durden on 03/12/2012 16:05 -0400

With two minutes to go, aggregate volume on the NYSE was running almost 30% below its average run-rate for the year-to-date. We ended the day with the worst volume of the year so far, down 25% below its average YTD. What should be more worrisome is banks' revenues which are being hurt by lower risk-weighted inventories, decreasing net interest margins thanks to the Fed, and now mind-numbingly low equity trading volumes (-19% QoQ sequential for the past two quarters) - especially as we are granted access to the Fed's stress tests this week (and the inevitable PR-driven requests for dividends and their following hype).

Charts: Bloomberg

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Mon, 03/12/2012 - 16:07 | 2248232 whatsinaname

Priceless

Bidless

Mon, 03/12/2012 - 16:09 | 2248244 FlyoverCountryS...

"mind-numbingly low equity trading volumes"

Just makes it easier for the PPT to TWIST, is all. Besides, the market was UP 37+ today, and after all, isn't that all that REALLy matters to the people feeding AgitProp to the sheeple?

PRAISE BE TO THE MESSIAH OBAMA!!

Mon, 03/12/2012 - 16:21 | 2248322 crawl

It is just another day in central planning paradise.
Bring back real capitalism. The sooner, the better.

Mon, 03/12/2012 - 16:29 | 2248355 JPM Hater001

So what happens when everyone stop all together but the FED?

Mon, 03/12/2012 - 17:17 | 2248558 markmotive

Screw the banks. Keep your money in a mattress.

Mon, 03/12/2012 - 16:29 | 2248356 GenX Investor

It's going to be the greatest episode of PRISONERS DILEMMA...EVER! Grab the popcorn!

Mon, 03/12/2012 - 16:24 | 2248333 SheepDog-One

Just shows how desperate they are now.

Mon, 03/12/2012 - 16:10 | 2248250 death_to_fed_tyranny

No one trusts the PONZI. I mean "market"!

Mon, 03/12/2012 - 16:10 | 2248251 Sudden Debt

Banks... Revenue... All in one sentence?! WaW!

Mon, 03/12/2012 - 17:47 | 2248667 CPL

Revenue...funny word to use for a customer's borrowed money.

Mon, 03/12/2012 - 16:12 | 2248254 DavidC

Yeah, but, Tyler, the indices are loving it, they're going UP...!

DavidC

Mon, 03/12/2012 - 16:12 | 2248261 Mr Lennon Hendrix

Day after savings time, every person is sleepy. Algobots rule the Street anyway.

Mon, 03/12/2012 - 16:13 | 2248262 vote_libertaria...

Of course they will get to pay dividends. It will be to counter weight the bad mojo when they fess up to being not so 'hedged' after all against that Greece mess.

Mon, 03/12/2012 - 16:17 | 2248287 DavidC

And a stupid pop AFTER the close...what the fuck's that about?

DavidC

Mon, 03/12/2012 - 16:18 | 2248298 AmazingLarry

Every step down is a step up. When you get to the top and look down, tis nothing but aiiiiiiiiir........

Got parachute?

Mon, 03/12/2012 - 16:20 | 2248311 Dr. Engali

The primary dealers keep ramping it up hoping the average investor will jump in. The only problem is the average investor isn't biting because they know it's rigged. So the banks are all bag holders. I wonder how they feel sitting on the edge of their seat waiting to see who gets the first margin call and starts the forced selling.?

Mon, 03/12/2012 - 16:22 | 2248327 SheepDog-One

Poor ol bankrupt avg investor Joe Six pack, now down to 1 measely 18 oz malt liker a day cant jump in at any price.

Mon, 03/12/2012 - 22:08 | 2249341 The Axe

I guess you watched "The Deerhunter " He made lots of money..actually piles...until that one chamber caught him..blew his brains out... This market may end the same way ONE

shot...over nothing left...

Mon, 03/12/2012 - 16:21 | 2248316 nobusiness

Never short a slow market. Actually, never short a market the fed manipulates daily.

Mon, 03/12/2012 - 16:21 | 2248320 SheepDog-One

Theyre just going to quietly go short and pull the rug out one morning soon...theres no point and no benefit to anyone in keeping this nonsense going.

Mon, 03/12/2012 - 17:30 | 2248617 ltsgt1

Nope, they are not going to short the markets. Since the retail investors have already pulled out, they are stuck with the longs. They are stuck until the dumb money return to the market.

Mon, 03/12/2012 - 16:22 | 2248326 Jason T

Traders are busy preparing their gardens for food this year knowing at current ponzi print rate...

Mon, 03/12/2012 - 16:54 | 2248454 death_to_fed_tyranny

Finished up the raised beds today. I'm planting Alaska Peas and Noble Spinach tommorrow. It is going to be a good year. Grow your own food and screw the the Food Corporations! But you already know,I am a terrorist. I already disclosed the fact that I love The Constitution, and I will defend it! FUCK OFF NAPOLITANO! Lizard Nazi Dyke.

Mon, 03/12/2012 - 16:25 | 2248342 resurger

i love Aviation, i came up with this term:

Stock Pockets: A region of low volume causing the stocks to drop suddenly.

Mon, 03/12/2012 - 16:26 | 2248345 ss123

Everyone is waiting for their new iPad delivery.

Mon, 03/12/2012 - 16:33 | 2248373 youngman

They will keep it up...they have too...the pension funds and others need to see success every quarterly report to keep the sheeple at bay...its not the housing...or gas and commoditiy prices that are going to make the sheeple happy...the stock market is a HEADLINE number that the politicians can blaze away with...success...recovery...were back...doubled in my first term...blah blah blah...

Mon, 03/12/2012 - 17:25 | 2248593 ltsgt1

Well, it shouldn't be too difficult to keep it up with such low volume.

Mon, 03/12/2012 - 16:44 | 2248420 Panafrican Funk...

The VIX is just silly right now.

Mon, 03/12/2012 - 18:25 | 2248769 GovtMediaLiars

See my comment below. And VIX commentary at the bottom of the page here.

I think this is simply the VIX finishing up its bottoming process that it has been undergoing for a few weeks now.

Mon, 03/12/2012 - 21:37 | 2249265 FreeNewEnergy

Yeah, I saw that the VIX was down and stocks were down around noon - 1:00. Strange, thought I. So, I went out and played 9 holes of golf - parred the last hole, nice finish for me. Before writing my daily blog post for Money Daily, I noticed the (lack of) volume. Sickening, really, but what can you expect from 10 years of PPT pumping and FED pimping.

2 weeks or 2 years is my best guess, since I figured it would all go boom in 2008. We've since had a three-year HFT ponzi market that is now irreparably broken.

When they can't make a market for already thinly-traded stocks, the game ends.

Fuck Wall Street, fuck the federal government, and everyone who thinks we're in a recovery. This sucker's at an end and the final Ka-boom can't happen soon enough.

I'm done waiting and listening to douche-bag economists and politicians. Jubilee, bay-bee!

Thanks to ZH for letting me rant and to the asshole .gov agents reading this, I'm here, muther-fuckers. Come and get me. I'm ready for my Guantanamo 4x6.

Mon, 03/12/2012 - 16:44 | 2248422 user2011

I will think that the days market drop will be around paydays, which fund manager receive the money from payroll deductions. That's when people got a lot of real money and force to invest. the remaining days are pep talking by CNBC, Meriyn lynch's "Breakout" channel, JPM and GS take turns.

Mon, 03/12/2012 - 16:53 | 2248456 ivars

New downtrend forming in GSR:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=36816#p36816

Mon, 03/12/2012 - 17:06 | 2248513 HungrySeagull

One day there will be a market where hardly anything happens. The bids will rot, the asks stagnant and headlines laughed off as the people pretend to work.

However in one far corner will be a Carnival Barker screaming out come one come all to the freak show for the money. Step right up here folks...

Anyone recall the click... clickety.... click... clickety as the weight shifts at the top of a vertical drop?

There is going to be a total drop, a free fall that will be unstoppable until the systems themselves burn. Circut breakers and market day closers will not mean anything until the very last of the slime is swept into the gutter.

For me it will be a glorious day when I discover Gold at 10,000 dollars an Ounce and Silver over 1000.

Mon, 03/12/2012 - 17:56 | 2248695 ivana

best is to fix S&P here for few weeks .

so that robots and algos can be overhauled and take a well deserved rest

Mon, 03/12/2012 - 18:13 | 2248737 GovtMediaLiars

The drop in volatility today was wild as well.
We've been voicing a VIX bottoming thesis for a couple weeks now and got even more confident about that view in our weekly recap on Sunday after last week's action.
Now today we get this wild plunge and we see this as very strong support for that thesis. We believe volatility has bottomed.

What say you?

Cheers!
Market Madness

Mon, 03/12/2012 - 19:12 | 2248912 Chartist