Retail Stock Exodus Continues: Fund Equity Outflows Continue For 23rd Out Of 24 Consecutive Weeks

Tyler Durden's picture

Yes, outflows in domestic equities may be traditionally perceived as a contrarian signal, but when they hit 23 out of 24 weeks for a total of $106 billion (and the one weekly inflow was $715 million) one has to start getting concerned about the cash levels of the broader mutual fund space which as had been pointed out recently are already at all time lows. In the week ended October 5, domestic equity funds saw an outflow of $4.3 billion, which brings total 2011 outflows to a total of $93 billion. What was just as notable about the week is that while traditionally we have seen rotation from equity assets into fixed income, in the past week a whopping $6.2 billion was withdrawn from taxable bond funds as well, implying that the ever increasing volatility not only means retail has thrown in the towel on stocks but that the already painfully low yields in bonds are forcing the long-term investors to get out of the market in its entirety.

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achmachat's picture

where is Robo when you want him?!

Belarus's picture

And while growth has climbed to a standstill, while confidence is in the tank, while money is fleeing, the only thing left to do is for the ALGO's to churn the market between 1220-1120, vice versus, etc. 

What a racket. Mom and pop's are finally catching on to this charade of a game, where it's not about true capital formation, but spinning the wheel with worthless paper.

SheepDog-One's picture

Even my folks who are wild optimists, Obama loyalists, fans of The Bernank man of the year....have recently told me 'This all stinks we're cashing out of our investments'.

UBIGDummy's picture

I don't know what this guy is talking about,  You should tell your parents to spend 25% of their investments in FAZ, DRV, skf and vxx,  GREAT TIME TO BUY;)

RideTheWave's picture

Don't worry. Mom and Pop will come back when boyz start up the new bubble. They only buy at the top. And don't you forget it. Where would that put us now. Not a top. Short and imbibe over-bearishness at your peril at least from a stock market perspective. Smart money is coming in.....

jdelano's picture

Hahahahahahaha..... "smart money". Good one.

long_and_short's picture

Look at the fund flows!!

interestingly enough jumped in Jan/Feb well after QE2 was in.

If that doesnt tell you mom and pop are wrong what does?

with that said, the bernank needs the euro crisi to unfold so that he can unleash the printers in the name of the system.  He wants us to beg for it and it will happen, but not without a crisis.

mjk0259's picture

Yes, mutual funds are BS. You can still make some money buying apparently safe stocks like electric utilities and drugs when it's crashing and sell when it's in a frenzy. I think the Black Swan book described this as "picking up pennies in front of a bulldozer".  Eventually there will probably be hyperinflation and this stuff will become worthless so I'm shifting to gold gradually. Probably a huge comet will go into earth orbit and shower the planet with massive quantities of pure gold soon.



UP Forester's picture

Only problem is everyone's pulling out from 401k's to pay for said electric utilities and drugs to keep from strokin' out in the dark....

winter is coming's picture

retail doesnt matter anymore... We have computers

pauhana's picture

Maybe the sheeple aren't as stupid as they seem most of the time.

Archimedes's picture


You should know better. If the retail herd will not voluntarily give their money to the market makers and become the greater fool then the Bernank will just take the Retails' money through "Quantitative Easing" (That is fancy talk for creating money) and all of their other "Monetary Tools".

FunkyMonkeyBoy's picture

Nice sell-off at the end and into after hours... reason buller, anyone?

SheepDog-One's picture

Nice midday headfake to lure any remaining bull into the top before they drop? Longs money just as green as shorts money for the taking.

Hell I dont plausible as any other conclusion.

sandorgb's picture

Did anyone catch Charles Plosser on CNBC? AT 15:46 he basically said flat out that the FED no longer has any credibility. Have Tyler link a video of that exchange. Look at the 1-minute chart of ESZ1. Seconds after Plosser drops the bomb, the market drops 5 handles in 2 minutes, and proceeds to shed 13 handles in 29 minutes. Of the course the market was already in profit-taking mode, but Plosser helped accelerate it. Quite fascinating how bluntly Plosser bitch-slapped his fellow governors. He must be pissed.

Mike2756's picture

Good volume buy spike at the close, right before they slammed the door shut.

Bansters-in-my- feces's picture

This is a good thing,right...?

urbanelf's picture

isn't this what happened in the run up to the flashy-crashy?'s picture

So where is this money going? ....Really...Tyler...where do you think it has gone to?

tekhneek's picture

30 year bonds of course. Gotta get "yield" somewhere...

AccreditedEYE's picture

To pay the rent and buy the food.... of course, not without getting its dose of premature taxation first.

NotApplicable's picture

Don't forget debt service. Still plenty of that out there, as ZIRP has yet to reach Main street.

SheepDog-One's picture

*cntrl-alt-PRINT* !

Dr. Richard Head's picture

Retail getting out of stocks and bonds?  Welcome to the 2008er's world of "Fuck this place.  This is bullshit. I'm otta here!"  A proud member since 2008.

LawsofPhysics's picture

Sell high?  Damn, they are on to us.

RideTheWave's picture

What Tyler misses with that its when retail is out...that the bottom is in.....retail generally only chases the top of the market.....that's why (as good as Zerohedge is) you need to use your commonsense filter of market can't crash when no one is their to panic sell.....2008 was 2008 because everyone was in denial and buying the endless dip.....probably because most were too young to have market memory of 1929.....a crash can not happen again (partly because of the "2008 market memory) and especially with the White Swan as the QE tail wind.....and for those that don't know the white swan....its Mr. Bernanke.....

By the way markets are not pefect economic forecasting tools.....and Germany had a great stock market before Weimar....

Stocks at their truest essense are pieces of paper that are chased like the latest Christmas toy fad and dropped when the fad is over.....that's it.....

Just because folks get econ degrees and Goldman pays for their MBA doesn't mean a sell side analsysts interpretation of behavioral finance is worth the toilet paper their MBA is printed on.....I will give you a PE that is 4 vs 8 on its PEERs and you can go and buy it when their earnings get cut in half and its now an 8 PE....if a company has systemic risk then a  PE times an eventual zero is....well zero.....and a disciple of sentiment and pure tape trading (like Jesse Livemore) will show you why the price is always truth and the news is there to rationalize it.....not the other way around....ever....

J 457's picture

Retail leaving = funds liquidating.  Funds have no cash to BTFD.  When they "have to" sell, and the buyers (retail or otherwise) do not exist, price drops.  Absent QE3 intervention, retail must lead the way to the next leg up. Before retail re-enters the market they need to have assurance of a more stable less volatile market, improved economic outlet, and better DC leadership and some problems solved- debt ceiling, unemployment decrease, oil price down.  Too may black swans hiding behind every corner to not expect this market to fall to 1020 range in near future, maybe weeks.  Bernanke wants to print to try to stimulate job growth, but he can't justify more QE if market is holding 1,220.  Last time this type ramp-up happened it had an underlying driver (QE2) but this time there is nothing (yet) to force any sustained move up. 

mjk0259's picture

Also, they need to have a job that pays enough for savings to be possible. The percentage of people in that situation looks like it's going to keep dropping for the foreseeable. And they have to somehow forget that the return on stock market overall has been 0 for the last 15 years without adjusting for inflation or taxes and that even if it does go up, it might go down 50% right at the time they need it.

ulvy's picture

Yep...not neccessarlity a bad thing.  if I recall...there was a massive outflow starting in April 2009 through Jan 2010 too.  The market only went up 40% during tha time. 


There were inflows right up to the April 2009 lows.  So then when the market starts to recover...everyone want out. 


How does that happen?  I have a friend who kept trying it hit the bottom on the way down in 2008.   He put more in at the DOW 12k, the 10k, and then 8k.   All he saw was loss after loss and was trying to catch a falling knife.  Finally on the way up he just wanted his money back to break even.  So he pulled the exact money out at the exact entry points of  8k, 10k, and 12k.


GrinandBearit's picture

We don't need no stinkin' mutual funds... Skynet runs da show now.

Whoa Dammit's picture

I don't think this is a sign of the sheeple becoming smarter. I think the sheeple are living off of this money in a vain attempt to retain their vanishing upper middle class lifestyles.'s picture

hhmmmm....maybe people are living in homes without making a payment for years....get kicked out of said house, then need money to pay for a place to live...this new expense demand take a lot of cash ... so then they stop buying ipods, cable tv, going out to dinner...etc etc.....uh...well...they will still buy the ipods i guess...

CapitalistRock's picture

You cannot "get out of the market in its entirety". What the heck does that mean? They went to US dollars? To euros? To gold? What?

I desperately want out too but nothing is guaranteed to preserve buying power. We are always in a market when trying to preserve our hard earned buying power. Personally, I like PMs long term and US dollars short term.

mjk0259's picture

Lot of unemployed/underemployed draining their savings including retirement and college plans to survive a while longer. I expect to join them eventually.


UP Forester's picture

That's why I've got chickens and a tractor...

equity_momo's picture

No where to run , no where to hide. Not even gold as a safehaven will make up for the shortfall in the crash of living standards.

Human nature tricks us into thinking we can outsmart or outrun  whatever bogey man is coming for us. Not this bogeyman. Best hedge is to lower your living standards slowly and deliberately so when the bogeyman bites it will just feel like a bee sting. To most it will feel like a shark attack.

If youre still paying 5 bucks for a coffee and driving a mile to the mall or kids school, you may want to think about changing that. And forget about those luxury goods and fancy vacations.

NotApplicable's picture

We could outrun and outsmart the bogeyman, if only it wasn't named government, and didn't have all of the exits blocked.

"Freedom's the answer. Now, what's the question?"

It's all about capacity to change, vs. the inertia of the past which grounds us. Look around, and you'll see people adjusting their way of life to the extent they are allowed to.

Space BATS's picture

This crash is going to be so epic.  So much crying when it finally happens.

Watch out for the crybabies now. 

Deadpool's picture

if not for HFT the market would be at least there'd be no more CNBC/Cramer.

Actually, a bullish case can be made for this chart. Sentiment indicators at extremes usually lead to a reversal and if this is the beginning of a reversal to a shallower reversal then seen above the SPY can rally into year end.

Fuck it, i'm getting a HELOC and buying QQQQ calls. ha ha ha!

J 457's picture

Only if people are buying will this rally into year end.  Outflows = selling. No buyers and the market moves down.

mjk0259's picture

$93 billion is only about $300 per American.  There should be at least another $150 left

ebworthen's picture

The good thing about your mattress is that it isn't a slot machine or a toilet.

silverserfer's picture

Paying of the debt on your house right now is a pretty safe place to put your $ other than equities. Your guranteed around 4% depending on your mortgage. If you diddnt pay too much for it.

Dingleberry's picture

Retail leaving the market.  WHAT TOOK THEM SO LONG!?  Let's discuss the possible reasons why they left (assuming they have some money to send):

1. Front running (theft)

2. naked shorting (theft)

3. banks and/or funds stealing the money via currency charges, back dating, etc (theft)

4. quote stuffing (fraud)

6. Banks like Goldman shorting the shit they recommend (theft)

7. FEES (theft)

8. NO ALPHA for TEN FUCKING YEARS!!! (due to theft and fraud)

9. Madoff-style thefts (theft)

10. Hi freq trading (theft)

11. Daisy chain trades (r/t #10) (fraud)

12. SEC watching porn instead of prosecuting thieves that do all the above. (theft, fraud and corruption)


All for now. One reason would be enough to bail on this corrupt market. I gave you 12, and there are plenty more.......

long_and_short's picture

Working as an IC/PM, with HNW, I can tell you they are getting tired.  The onlything keeping them in the game right now is that we were hedged going into this mess in Aug/Sep and actually had +ve prints from Sept MTD and YTD, 1 year figures crushing the indexes.

Talked to a few peers and they are getting the gears MAJOR.

Once we turn a generation off of equities that will be the time to go all in.

question is when is that? SP 450? time will tell.

pappyhlace's picture

what we need is a fund to capitulate...
once they start liquidating and other funds start unloading at the same time then we get a crash

i'm wondering how many funds went short only to get rocked during the last rip your face off short squeeze...