Investors continue to exit equities

One of these days we will have stock prices worth buying again. In the meantime this is a thinly participated market, with a handful of algo sharks churning away, chumming the waters for the desperate and unsuspecting. So long as the bull-case rests on more central bank tricks, while the economy and demand turns down, we can tell that we are no where near good value yet.

Bloomberg’s Mike McKee discusses the lack of volume in U.S. markets and how global markets are basically in a holding pattern, waiting for Federal Reserve chairman Ben Bernanke to speak later this month in Jackson Hole.

Here is a direct link.

Meanwhile as shown in the chart below, retail investors continue to bail out of equity mutual funds (red bars are outflows).

Makes sense: the 99% are needing to raise cash to pay bills. They have lost money in equities now for about 15 years and are starting to catch on that they are being abused. They have lost faith in what has become an increasingly rigged system. About time.

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6 Responses to Investors continue to exit equities

  1. dave says:

    Those trying to short this market are making a mistake with this risk rally just getting started

  2. dave says:

    “Falling government bond yields are due more to investor fear and less on economic reality.” … Bill Carrigan

    Investors fear and irrationality is causing this massive push into high dividend yielding stocks and treasuries but this is beginning to unwind. Ignore all this daily nonsense of worrying about Europe this will pass and bond and treasury yields will bounce from these historical and extreme lows.

  3. aliencaffeine says:

    This months PNC missive is called “Demographics are Destiny”. Some very telling charts and graphs vividly showing the Boomer Age Bulge now beginning to lap at the shores of America.


  4. Roberta says:

    I’m guessing the current administration has enough of the stimulus $$ stashed to keep the markets propped up until after the election. They just need to quietly inject a little each week.

  5. Andrew says:

    The recent rise in bond yields took many by surprise. All that money that flowed into bond funds in recent years could face substantial capital losses when rates start to really rise. How will your company time when to get out of treasuries?

  6. dave says:

    I would like to add that if you draw a trend line for the the S&P from it’s all time high in 2007 to it’s April high in 2012, it is now above that line although only so far for 1 week. I think it may be worth watching, as it could indicate higher movement to come and could be a support line now in the event of a pull back. If so the pull back would be very light on the order of 20 or 30 points, much less than I believe the majority are expecting. Yet another reason to be cautious of trying to go short this market here.

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