Finland's Largest Pension Funds Dumps US Stocks Because "There Is No President In The US"

As President Donald Trump prepares to meet with Finnish President Sauli Niinisto in the White House on Monday, a portfolio manager at the Baltic state's largest pension fund has told Bloomberg that he will be trimming exposure to US stocks. The reason? “It seems as if there is no president in the US.”

Risto Murto, chief executive officer of Varma Mutual Pension Insurance complained that Trump’s response to the attack in Charlottesville Va. demonstrated that he is incapable of governing the world's largest economy, and that it appears the US is more or less running on autopilot.

The reason for Murto's concern: as the financial crisis showed us, when there is trouble in the US, it runs the risk of spreading to the rest of the world. Musto also cited Trump’s seeming inability to work with Congress as “particularly worrying,” given that it threatens to disrupt the implementation of the Trump economic agenda. Hoped-for tax cuts and infrastructure spending helped push US stocks to record highs in the wake of Trump’s inauguration.

“’It seems as if there is no president in the U.S.,’ Risto Murto, chief executive officer of Varma Mutual Pension Insurance Co., said in an interview in Helsinki on Wednesday. ‘If I look at what is the moral and practical power, there is no longer a traditional president.’


The unorthodox start to Donald Trump’s presidency - dominated by Twitter outbursts that have included nuclear saber rattling with North Korea and a defense of white nationalist protesters - has turned the U.S. into a source of global political risk. The legislative program that many investors had hoped would support economic growth looks to have stalled, and Murto says Trump’s apparent inability to work with Congress is particularly worrying, given the global ramifications of decisions made in Washington.”

Varma reduced his fund’s equity weight by 5% in the second quarter, before the recent pullback in US stocks, by cutting a chunk of its US-stock holdings, according to Bloomberg. Varma has apparently listened to Jeffrey Gundlach, T Rowe Price, and a host of others who have warned about a selloff in the coming months. To this end, Murto has increased his fund’s cash holdings, preparing to seize upon any “opportunities” that present themselves in the near future. The fund is also using derivatives to hedge its fixed-income position in anticipation of further interest-rate hikes from the Federal Reserve.

Of course, another reason for selling was to lock in profits after “a very good run in equities.”

“Varma reduced its equity weight by 5 percent in the second quarter, mostly by cutting U.S. stocks. It’s now holding more cash and is ready to jump on opportunities as they arise. The fund has also shortened the duration of its fixed-income investments using derivatives positions to prepare for higher interest rates.


Some of the reduction in U.S. stocks has to do with realizing profits after “a very good run in equities since February 2016,” said investment chief Reima Rytsola. “It’s natural that it will halt a little bit.” The “U.S. economy is still doing ok,” he said. But the bottom line is that ‘we are worried.’”

Furthermore, Varma worries that Trump has already squandered whatever good will he had with Congress, raising the possibility that he may never pass the fiscal stimulus measures that had energized so many equity bulls earlier this year.

Stocks rallied in the months after Trump’s election win, on anticipation his administration would push through a business-friendly agenda. But the president’s lack of leverage with Congress now leaves his policy agenda - from taxation to infrastructure and domestic policies – ‘totally open,’ Murto said.”

To be sure, Trump’s inability to push through controversial policies could benefit countries like Finland, according to Bloomberg, because it could prevent Trump from fully embracing protectionism.

“One bright spot for trade-reliant nations like Finland is that a stalled Trump agenda means he may fail to push through his protectionist goals, Murto said. Most of Varma’s stock portfolio is in Finnish companies that rely heavily on Asian business. ‘In terms of direct exposure, the bigger news to us is that China is accelerating,’ Murto said.”

Then again, if recent fund flows are any indication, Murto’s investing thesis has failed to account for one of the most important factors influencing global equity valuations: Central bank intervention.


peddling-fiction Arnold Mon, 08/28/2017 - 08:18 Permalink

As a citizen of Finland, I can add that we have had traitors as Presidents for the longest time. They have been selling our country down the river for decades. The Google "datacenter" in Hamina (border with Russia), perfect for censoring content in Finland and the Baltics and blocking/modifying it, courtesy of the NSA, tells me this is just NWO theater. Of  course our President is a Freemason/Illuminati like all other political leaders. You guys are humanity´s thorn on the side and will be held accountable.Baba: Fine tune the melba toast to rye bread for added punch. Add a piece of herring for smell.

In reply to by Arnold

GUS100CORRINA 20-20 Hindsight Mon, 08/28/2017 - 09:32 Permalink

Finland's Largest Pension Funds Dumps US Stocks Because "There Is No President In The US"My response: Another MAXIST PROGRESSIVE LIBERAL DESPOT who, not being an American citizen, wants to express an opinion that comes from a NWO doctrine.Last time I looked, Finland was pretty much a SOCIALIST nation that murders babies and promotes immorality everywhere.Give me a break. The POTUS is elected by the American people, not DESPOTS from Finland like this Pension fund manager.

In reply to by 20-20 Hindsight

20-20 Hindsight GUS100CORRINA Mon, 08/28/2017 - 09:43 Permalink

"Finland murders babies and promotes immorality everywhere."  LOL.  The abortion issue is so 1980s: welcome to the 21st Century.  Besides, don't expect to get much traction from a great many ZH'ers here.  They love hate, violence and anarchy and have zero sense of morality.  They love their Orange Jeezus who loves to grap women by their pussy and then brags about it. They love their Twit-in-Chief who attacks, belittles and insults anyone who dares to contradict him in any way.  That's the DESPOT... er... POTUS you're referring to. 

In reply to by GUS100CORRINA

20-20 Hindsight BarkingCat Mon, 08/28/2017 - 12:43 Permalink

I agree with you 100 %, Barking Cat, but I don't buy the "Illuminati" bullshit.  There are some pretty nasty people out there, whether they are government officials, politicians, bankers or private sector representatives.  Those people are selfish, greedy bastards and they like to manipulate people to get what they want.  I believe that some of them are part of the "military industrial complex", but as such I don't think that they're part of a global conspirary.  They're just all in it for themselves, period.

In reply to by BarkingCat

CPL eclectic syncretist Mon, 08/28/2017 - 10:55 Permalink

They were all notified about the situation.  They aren't the only one pulling all the Israel/US investments from the kill bucket list sent around.  Remember the best two ways you can hurt someone that's very effective1)  Cut off their balls and dick then watch them bleed out.2)  Punch them in the wallet.The process flow is dead easy on how to manage this system.  If number 2 doesn't work, we can always go back to number 1 as the standard process and practice.  It gets people modivated very quickly and to quote my grandmother's needle point.  When you've got their balls their hearts and minds will follow.

In reply to by eclectic syncretist

Crazy Or Not BabaLooey Mon, 08/28/2017 - 07:37 Permalink

To be fair "the market is a bubble" has been offered frequently in comments and posts on ZH.How much higher can US stocks reasonably go before a significant correction? PF's like Varma's look for safe solid stable single digit growth, with some regional support bias. He's probably not far offthe mark if  he's suggesting the top of the bell curve is close.... As far as as rhe rapefugee part...well it is Finland so he's probably going to video that and upload it...

In reply to by BabaLooey

aurum4040 BabaLooey Mon, 08/28/2017 - 07:48 Permalink

Auto pilot? This fuck is one the reasons why Europe has litterally been ruined by scum sand dindus and he's talking about Charlottesville. Stocks had such a run because of Trump but that doesn't matter of course.Somewhat OT...Say what you will about Trump but I'd still rather have him in there than anyone else who ran. Did anyone honestly think this was going to smoothe sailing? Did you think Trump wouldn't have to conceed in some ways to  the Goldman Cabal and the bureaucrats? Did you  think they wouldn't  try to crush him at every turn? Trump volunteered for the toughest and most complicated task that anyone on Earth could ever dream of tackling. Bar none. If Trump pulled out of Afhganistan, what does that say to the world? Our troops whod think theyre giving their lives for nothing? For us to give up and create vacuums? I get the whole war machine MIC disdain. The whole non interventionist idea. Things are fucked up. But the world is more complicated then not protecting every one of our interests because every other country is looking to do the same damn thing and just waiting for us to slip to the point of taking us out. And we are damn close to that. At this point, the military needs to continue to back the dollar and we need to continue fighting for the dollar, our interests. If we don't, what kind of life will your kids have? Worse then you think. The time to reign in spending is over. The time to spend as much as we possibly can borrow at the cheapest rates in history began 8 years ago - we are beyond the Rubicon at this point. The time to pull back troops and close  bases has passed. Like or not ZHers, these are facts. I don't like it either. But reality is reality. My whole point is to step back and think. Think about what you have, why you have it, and how in the hell we possibly will be able to keep some semblance of it for our kids. It's our life challenge. 

In reply to by BabaLooey

French Bloke aurum4040 Mon, 08/28/2017 - 19:22 Permalink

So what you're saying is, it's OK for the US military, backed by it's NATO & UN lackies, to keep kiling thousands of peope around the world in the hope that your kids will be given a few more crumbs in the future. THE GAME IS OVER! The ponzi scheme is running out of steam and the ONLY chance your kids have is for a reset and a fairer world. Your whole attitude is defeatist and sactioning the murder of people elsewhere is not the answer to the problem. Ending the MIC and banking cartel is.

In reply to by aurum4040

halcyon BabaLooey Mon, 08/28/2017 - 08:49 Permalink

This is basic cyclical rotation in global macro investing. Trump is just an easy explanation, so that one doesn't have to explain the intricacies and risk models to dumb journos.Finnish asset managers are - if not quite the brightest - very practical and down-to-earth, not prone to political ramblings or getting swept by the political winds. Only numbers matter.Me thinks it is the Bloomberg in this case, who is trying to make a mountain out of a molehill. 

In reply to by BabaLooey

SoDamnMad Arrest Hillary Mon, 08/28/2017 - 08:05 Permalink

If it wasn't for Sons of Odin protecting the streets in Finland the place would turn to shit like Malmo, Sweden. The government hates them but just like the red berets of the JGuardian Angels in NYC in 1979, they provided another set of eyes for the police and are now organized around the world to bring some control to the streets.

In reply to by Arrest Hillary

FreeNewEnergy Mon, 08/28/2017 - 07:18 Permalink

It never ceases to amaze me that ignorant cunts like Risto Murto are in positions of such power. The world is being run into shit by people like this cunt."Trump's apparent inability to work with congress..."Try it this way, stupid, "Congress' unwillingness to work with Trump..."FIFY