Liquidation selling: coming to markets everywhere

City Financial Investment Director Peter Toogood discusses the outlook for the global markets following the worst month for stocks since 2012. Here is a direct video link.

Here is the cash on the sidelines that the stock permabulls keep telling us will be coming in to buy today’s insanely valued markets any moment now.  At 3.2%, mutual fund cash levels hit the lowest levels ever in August, shown here (in blue) since 1984 with the S&P (in black).

Mutual fund cash levelsAnd here are the margin loans that have already been borrowed as against security portfolios to buy more insanely overvalued securities as well as art, cars, real estate, trips, living expenses. Yup, this has happened… ‘smart money’ this is not.  See WSJ: Margin calls bite investors, banks.   Forced selling is likely to whack more assets than just stocks this cycle.

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