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One Word...Volume
The S&P 500 closed practically unchanged today - recovering from decent selloff to a late-Europe-session low - amid volume that was over 30% lower than at the same time last year. Investment grade credit, the high-yield bond ETF HYG, and broad risk assets in general kept pace with ES (the e-mini S&P 500 futures contract) but high yield credit (tracked by the HY17 credit derivative index) outperformed considerably - moving to its best levels since late October. This disconnect appeared as much driven by technicals from HY-XOver (Long US credit vs Short EU credit) and HYG vs HY17 (a high premium-to-NAV bond ETF vs relatively cheap high yield spread index) trades as it was a pure risk-on trade. Elsewhere, the USD retraced only marginally the earlier gains of the day (with EUR hanging under 1.2950 by the close) as Treasury yields jumped 5-7bps more (30Y +14bps on the week now) as we can't help but notice the correlation between TSY weakness and EUR strength for a few hours this afternoon (repatriation to pay up for tomorrow's French auction?). Commodities were very mixed with Copper sliding notably (decoupling from its new friend Gold which rose and stabilized this afternoon over $1610) as Oil pushed higher all day (over $103) on Iran news and Silver leaked back this afternoon (under $29.5).
US equity volumes remain very low - not bouncing back at all like last year's! We also note that ES (e-mini S&P 500 futures volume) is 35% below its medium-term average. There were two periods of activity (where notably larger than average trade size occurred), the first was heading into the European close as we bounced off last week's highs, and the other occurred into the close as it appeared larger traders were covering longs.
Much like yesterday, ES, investment grade credit, and HYG all tracked each other rather well but the major disconnect was HY17 (the high yield credit spread credit derivative index). Breaking above $94 takes HY17 back to late October 2011 levels - near its best levels since inception in September. As we noted above there are some technical (flow) reasons for this related to popular trades that are perhaps having a more significant impact on HY17 price movement - these are the 'US high yield will outperform European high yield bonds as Europe's supply concerns are massively crowded out by sovereign issuance and deleveraging' which means being Long HY and Short XOver (Europe's high yield credit index). This trade was perhaps laid out today as the close of Europe saw HY17 take off.
The other trade that has become more obvious as increasing numbers of funds trade HYG - that is the compression trade as HYG has outperformed dramatically (and trades at a considerable premium to NAV).
Nonetheless - for months we have been pointing to the considerable underperformance of high yield credit as an indication that the equity market is over-enthusiastic. We worry that today's surge was a little too scrambling and given its focus in credit derivative land (and total disconnect from other realities) we suspect it is not the all-clear that some will think it is.
Copper is now underperforming the USD and is lower for the year as Oil and Silver resync coincidentally at around a 4.75% rise for the year. Gold was stable for much of the post European day at around $1610-15 - up around 2.9% on the week.
Broad risk-driver assets stayed well correlated today, as the lower chart shows, and in general ES and CONTEXT (the broad risk asset proxy) stayed in sync for much of the day - despite some overnight derisking efforts (mainly due to TSY 2s10s30s decompression).
Charts: Bloomberg and Capital Context
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There is no new money coming in via money market and 401k's.
There will be no volume, we are done with this broken mess.
Its "GAME OVER"!
All we see is the HFT's playing with each other.
Let's be clear about this though, those levers have access to hundreds of trillions of dollars. The WH and the Fed do not want this. This is also a bipartison effort, thus why Bush ran huge deficits and issued TARP. The next guy (ubless it is Paul) will have the same fiscal policy, and the Fed will always have the same monetary policy. The retail investor has not mattered for 3 years (at least) why would it matter now?
All that matters are the machines trading with each other. So what else matters?
THE MUB is going up,,,,everything looks fine,,,,chinese new year jan 23rd,,,year of the dragon
The markets have died under this administration and this fed.
Yeah, it was just this administration. LOL! Wake the fuck up, the "markets" have been gamed for quite some time. It has been getting particularly bad since the U.S. switch to an entirely FIAT-based currency. Fuck, the entire world uses rapidly devalued paper and still allows bankers and financial paper-pushing fucknuts to create "money" of thin air without adding any REAL VALUE to the system. There is a very real cost for creating captial without creating any real value. Still beleive in infinite growth with finite resources? Good luck with that.
At best, market activities amount to mere quantum fluctuations, or "jitters" if you prefer. Feels like quiet before storm. But we do have another LTRO next month, to juice the Eurozone, and then, who knows. Greece is off in its own little corner defaulting and no one is paying attention anymore. Wonder how those CDSs will be settled on.
its the global economy walmart and mcdonalds are booming
Yes this guy the marxist you will vote for again has shown no faith in the free markets.
sure, blame Obama
Dead-empty market casino, only thing keeping it going is levers getting pushed or pulled behind the curtain.
viagra, bitchez!
I cleaned my 401K out 2 years ago. I never really made money in any of the 401Ks I have owned over the last 20 years. It couldn't even keep pace with inflation. Better to have it in PMs then let some future MF Global steal it.
Yup, October 2010 I exited my 401K into the money market and my IRA into physical PM's. Now how do I get it out of the 401K without quiting my job? I have already requested a self directed 401K but no go.
Rigged. It's not a market. It's a fleecing barn.
Anytime a financial company can take your hard earned money and keep it for decades without promising a set return, and even penalize you for early withdrawal it is a con. America has been conned by the whole 401K concept. We are fed the benefits of 401Ks from every corner of the financial universe from an early age. The power of compound interest. I never saw the power of compound interest work like it did in the sample spreadsheets they use as your potential earnings forecast.
I wonder if the money is even really there. Just ask the MF global account holders. There money was suppose to be safe in their private accounts. Just look how that turned out.
JPM_ater!
mebbe start deciding whether you have any legal right to what you want and if so, how to play that angle to get control of your fund
slewie-nomics indicates that the power of compound interest to "work for you" decreases as interest rates approach and reach zirp; but money is still cheap and easy; just don't forget who ya work for!
Call up the 401K administrative company and have them mail you a check. Be advised you will pay an early withdrawl fee (10%) plus potential employer matching funds that have not been vested. You will also pay taxes on the money as earned income. Your situation may be different form mine, but I cleaned out two 401Ks from Fidelity. Good Luck
Ignorance you were able to take money out of your 401(k) with your current employer? I highly doubt that. Maybe a former employer. Some jobs allow "in service withdrawals" but very very few. If yours does you are lucky, and can get at least something out.
You don't. You can't. You can get out of the market. Put the money in the stable value and buy treasuries and be a good citizen. You don't have a choice anyway.
anyone can junk me on this but absent an in service withdrawal somebody give this guy an answer and you will have my praise. Advise him to do a loan and you are probably not a fiduciary.
yep, just more posers on this board, with pretend 401K's..... Stupid advice, even if you could move an active plan- oh, and he forgot to mention he's also losing any dollar-matching program he enjoyed, which is the biggest reason to enroll in a 401K, but hey, he doesn't seem to let reality get in the way of his "self-directed" 401K plan, lol-
Let us know how that goes for ya, dude.......
I have a simple retirement plan... my employer matches up to 3%, which vests immediately. I have approximately 30-35 years til retirement... I contributed 4 years worth @ 3%... I pulled 80% out last month and will pull the rest out next year when the matching hits... mailing my estimated taxes this week with 10% penalty included. As of January 1, I no longer contribute to the plan.
You look me in the eyes and with a straight face tell me that money has any chance of being there by the time I reach retirement age or has any chance of keeping any remote purchasing power compared to the present.
I figure I'm not the only one... I was hoping to get an exit interview with the plan administrator and talk about MF Global, the down rating of the financial institution where the money is kept, the political environment, etc., but they just cut me a check and it was ready to pick up in 30 minutes. They've seen this one before.
The way I see it, I got to pull out all of the money I contributed and taxes ate all the money my employer contributed... of course, that's only nominal amounts... I've been completely raped by inflation for the last 4 years... but didn't lose any principal. Either way, I can't mitigate the damage from inflation while the money is sitting in the account... nor can I better prepare for deflation... it's a truly sick game that few are aware of and, even if aware, are trapped by the terms of the retirement plan and/or economic consequences of withdrawal.
At any rate, losing the employer matching has a completely different appeal for some folks (the young). We will never have voluntary retirement accounts... (except for the few that BT Barnum predicted). That money is much better put to use in a small business, trade, food production, numerous inflationary hedges, or even rental property. Alternative investments may not keep pace with inflation, but the pain will be less... for a while.
Most "profit" in 401K this employer is match (18% over 8 years). That and fresh deferrals--a penny saved is a penny earned--LOL! Seriously, how much longer can ZIRP continue under pseudo-democracy? People got to wise up and rise up--eventually?! Or maybe just quit now (2014 was my goal), cash out and move to Colombia or Nicaragua (Someplace with a future? LOL!) LQD (AAA corp style) fund (until last year) worked better than "stable value" in my experience. All others tore me up bad. Upside--I saw the 90s--ooh la la! So seriously considering the "Latin relo" option this point. Thoughts? E.g. would I be going from theft by ZIRP to a ransom note? New Zealand? Australia? Help a zero bros cash pile out here... (IMO MF G proves gold's run is nearly over--though I did like that 401K borrow => gold story. Never would'a thought of that one. Guy belongs at GS.) What's a "PM" anyway?
JPM Hater...here are some options to explore on getting your 401k dollars out of the plan....
1 If you are over 59.5 the plan may allow for "In Service Distrbutions" You can still work there and take your dollars out...A 1099 gets generated and you pay taxes on the gross amount uness you roll it over to an IRA
2. If the plan allows for loans, you can take a loan out for a max amount of 50K...bad part is that your pay will be docked for repayment of the loan...
3. If you are able to claim hardship...(defined by our f(r)iends at the IRS) you can take the assets out, but subject to 10% penalty if you are under 59.5 and taxable income...OUCH!
4) If you scam this one, quit and asked to be re-hired! Now that is known as a triggering event....and you can take the funds and roll it to an IRA...This move takes balls...cause your employer can say fuck off and not hire you back....
Good luck....
Thanks. I have looked at each of these and none work. Offered to quit and rehire and they said no.
So is the money market account the best option?
JPM I was not trying to be an asshole. It's a fact that it is incredibly hard to get money out of a plan with your current employer. Without an in service withdrawal option you are pretty much screwed. You can go the way of a loan but there are consequences with that. If you qualify for a hardship your are probably in too bad of shape for anything to make much of a difference. You have to look at your investment choices and pick the best of the worst. Or maybe stop contributing and use the money (after tax so it's less) to buy the physical that you want.
It's almost like they designed it that way or something...weird.
ha! I see what you did there. Sarcasm.
quick.witty.funny.
If you are worried about the market and dont want mutual funds i guess that is your only choice...
Did you ask about adding a PM type fund?
You can always place a scare in your employer by asking to see their IPS (Investment Policy Statement) and what their methodology is for fund selection and deselection...that question alone will give them a case of the hershey squirts....I would ask them for every piece of information on the investment menu...They are fiduciaries to the plan and are "personally liable" If they feel that comfortable about the investment offerings they should know that they have skin in the game if they truly believe they have a solid fund menu....
By the way if they refuse to answer your legitimate questions....call the DOL...they love getting involved to help out plan participants..
Good Luck!
Popped mine into the 40k's US Treasuries fund last August and have done quite well. I wouldn't leave it in any of these other goofy funds equities if you paid me (and gee, I guess my employer does do that.)
If you are worth anything to them, you could say either you rehire me or I just quit and move on. Thats what I did lol.
Over the last 3 years since my eyelids were peeled back, I've closed an IRA and a 401k (and sold my house - thanks Reggie!) and put every penny towards physical gold and silver (after paying off a ton of debt). I have $10,000 in my current employers 401k. Haven't contributed to it in a couple years, but cannot cash it out and it just burns my ass up. Figure that is my two month buffer when I get canned some day. Twice I have borrowed the maximum against it, bought gold, then paid it off out of my paycheck. Will do so again this summer when I'm eligible.
Good for you worms. Looks like you made the best of a bad situation with the loans. Glad it worked out for you. Advising someone to ask their employer to terminate them and re-hire them in this environment for a qualifying event is some scary ass advice. Just my opinion.
this is one of those cases where the difference between "then" and "than" is quite important...
just saying.
I get almost everything except how 30% less volume = market stability. There would have to be a propotionate percentage of buyers and sellers leaving the market and given the outflows from Mutual Funds I just dont see how that happens. More and more often I am finding like people who have simply exited the market.
You know what they say- or at least I hope you do because I have no clue how to explain this.
I guess if there was 1 bull all day in the market, that would mean the markets are super stable.
Who knew The Bernank had horns...? :>D
I used to hold lots of individual positions, never planning to sell most of them.
Now, in the extend and pretend ETF and index investing world, it's risk on, risk off, or cash.
Fewer trades = lower volume. HFT can do the price discovery for me.
A study in zero volume today...the VIX instruments. Just absurd. Watched the VIXY today, in particular. The opposite of fluff bid lifting...just bid dropping.
There is almost zero participation in this market. On any other planet, this illiquid market would be plunging. Go Ben Bernanke...the ultimate case of the Greater Fool!
Apathy, bitchez.
This low volume is great. It exposes the market for the fraud that it is. Every day like this exposes their scam even more. I personally pulled out months ago. PMs and the old lead/copper mixture.
this low volume is great for cnbc, public employee pension fund managers and obama. and the resultant stock drive upwards is only leading to further public exploitation of the markets reputation for "strength", not the exposure of its barren wasteland..........
Any idea when BOJ will intervene? I don't think they can hold long for EUR/JPY and USD/JPY at this levels.
Please notify us if you hear anything. time to load on those crappy crosses.
Not exactly on topic but interesting nonetheless if only because of its scathing tone:
From The Japan Times: For How Much Longer Will Japan's Fate Remain In The Hands Of Amateurs?
By ROGER PULVERS
Special to The Japan Times
As we enter into a new year in which last year's greatest event is still, dreadfully, uppermost in the mind of everyone in Japan, let's pause to think hard about the Great East Japan Earthquake of March 11, the tsunami it triggered, and the release into the environment of radioactive substances from the Fukushima No. 1 nuclear power plant.
Since then, Japanese society has turned its attention — in the government at all levels, the media, educational institutions, artistic fields — to a single question: How can the Japanese people rediscover the sense of accomplishment and hope that sustained them for decades following the end of World War II in 1945?
and later...
If there was an Ignoble Prize for Prevarication and Coverup, last year's would go to Tepco for its repeated, official use of the word s?teigai (meaning, "beyond the realm of predictability") in mitigation of its response to the tsunami that led to the meltdown of three reactors at its Fukushima plant.
http://bit.ly/wbMeTO
Bitchezoids rule!
tell you what the HFTs fucking RAIDED Netflix. anomolous trading at 1:16pm EST. HFTs will take this stock to the moon lol
i felt what i thought was a low-volume melt up going into the last hour
so i just started punching myself in the face
Maybe it's just that you yankees are so stupid:
http://www.economist.com/node/21542202
Without you, Europe would already be at least 30% lower...we are just waiting for you to catch up...
Don't no what the big deal is, Nasdaq neg, S&P at 0, Dow...well who cares a no volume meltup means only one thing - this market has topped. What I would be concerned about is the bullsh*t from the EZ, especially inflation dropping and the PMIs looking somewhat rosey. Now either they have the Chinese fudge team helping them out or they are desperate (or both) which smells like failure, which you sell on. Start of the year 'seasonal strength' BS out of the way we can see the pay-backs creep in, namely the stat fudging that occured start yr
As for HFTs, nah, they handled end year really well (trading on supports), this meltup had to be momo desks throwing some juice in, albeit not a hell of lot. Equities look weak.
Also the EUR was sell on Asia's last session prior to EZ/US markets open, that and the shanghai was slaughtered on the close.
Bad vibes again...
So stock market bulls don't need trading volume, they don't need revenue growth, they don't need job growth, they don't need wage growth and they don't need economic growth.
Got it.. okay.
let the chaos begin.
Know some people with money tired of beat the bot game and have just purchased bonds. Let the HFT bots go play with themselves. Algorithm vs Algorithm. May the best HFT Algorithm win!!! Sit back and watch the fun and some Market maker blow up while you collect a consistent return. The bonds are good out for 10 years. Have at it you math PhDs working at Goldman Sachs and others.
These markets won't tank until people start getting fired. 401k pulls outta do it.
You called hy17 outperformance yesterday and again today!!
There is more than enough volume for me. What exactly are some of you here bitching about?
The volume read is astronishing. Does it portend a dive or another spike up? Looks precarious to me. I'm short S&P and long gold. I'm just a krill out here trying to get a piece of flesh while tiger sharks fight it out with whales.
Hey, at least subscribers watched 1.2 billion hours of Netflix in the 4th qtr. Rally Time!
/snark
My guess is it's because they are unemployed with nothing else to do.
From the top of my head: During the decades of fiat expansion, asset turnover ever increased, thereby continuously accelerating the transpiring of the resulting nominal value appreciation through the system. As with every ponzi, the greatest net gain was created for those at the top of the pyramid, be it through creating value perception and the selling the dream-IPO or mainly thanks to being so close to the God of cash in the ivory tower, way up in the stratosphere and benefitting from the time lags, the self-created delays and the resulting asynchronity, when the cash bags poured out in heaven slowly drippled down to earth. The asynchronity is a factual mismatch of perceived money supply aka cash exchange rates for assets, increasingly widening with the distance from the issuer. Primary dealership and FED access in this world function like an oligopoly with a guaranteed spread for knowingly multipliying and distributing worthless shit and absolute protection from having it competed down to zero. Sure, that sprad would incentivize anyone greedy to create new routes for multiplication and distribution of thin air ever more and faster circulation thorugh the system and its counters.
The final and most amazing trick of the show really stunned the audience, though, making the previous show appear like an amateur joke. That cash, the dollar bills every one wanted to have were for a short glimpse visible to everyone in unimaginable quantities on the stage. Even those auditors from Washington were oln the stage and agreed that the money was there. Their bean counter fightng over the exact amount even faster materialized the mountains of cash in the minds of the audience. As suddenly as that cash had appeared, it was gone, leaving every single person in the audience with the sense that they no longer appreciated this shitty piece of paper. No matter what happened, everyone could tell from the other faces, that it had really been there,
In every ponzi or fraud, be it the sale of shit as gold or the collection of gold as a relief frm a burden, the fraudster needs a pyramid of believers buying his idea, further selling it naively through their reputation and credibility. To hide his trails near the end of the game, the fraudster needs a slowing down of and delay in the distribution process, when the fraud threatens to become apparent.
So, the endgame of the global, vertical power ponzi after it has gone through the necessary stages of multiplication will be, to artificially maintain the image of that shiny shit and the mental recalling of the physical burden of that meanigless shit and leaving the scence quietly, before the pyramid breaks and people would get really angry.
The implementation and increasing relative volume share of HFT is like virtual dealers playing dealers in the casino, told so by the casino boss, so the poor losers of the rigged game would let him leave with bags full of cash. Why? The show was still running and the tables seemed at least sufficiently active to win back the losses. What the losers missed though, the table limits had been lowered dramatically and even if they would now win forever, they could not make up for their losses.
Even to the knowing spectator, the current liquidity provision levels of HFT, their power to shift perceived fair pricing either up or down at will combined with the volume-decrease (or pulling private sterilization of assets) lowering the cost of keeping asset valuations up through continuous market pricing seems like the alchemists dream finally came true!
yes. that is exactly it.
[quote]
...How do we do it? how do we do it?
Volume, volume, turn up the volume!
Now you've heard it advertised, don't hesitate...
Don't be caught with your drawers down,
Don't be caught with your drawers down!
You can step right up, step right up...
[/quote] -- Tom Waites, "Step Right Up"
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