Credit deflation and the reflation cycle to come.

[Democorruptcy]

1 hour ago, sancho panza said:

And social care packages running at £1000's per month currently funded by councils.I think merging NI/income tax makes a lot of sense.

Depending how it was set up, it might catch out a lot of people not working and living on unearned income.

[Harley]

12 minutes ago, sancho panza said:

it will cause mechanical selling,which will cause more mechanical sellling.

Worse, there may be no-one to take the bid.  There are only a few big ETF providers in the market - who are they going to sell to?  Gap down, a long way.  Next year may be right.  I'm front running it right now.

[Harley]

43 minutes ago, sancho panza said:

Priceless....I wodner how accurate the data is and how they got it?

Reminds me of Dough Short's chart on NYSE margin debt.

thanks for keeping positng these tweets and charts barnsey.I'd never come across that except on here.

 

Heard an interesting snippet from a professional recently that the S&P is also being supported by a lot of overseas money as it's the only market big enough to take such large sums.  So one argument would be it's resilient, but the other is it depends on the fragility of that money - is it debt based (of uncertain tenure), will geo-political events cause it to be withdrawn, etc?  People talk about the Chinese buying US government debt but no-one talks about equity.  Worth a look.  Makes geo-politics key.  As does how much of that overseas corporate profit repatriation is going into the US market (buy backs versus equity purchases) versus elsewhere.  Maybe just sitting in the Eurodollar market, etc as I'm not sure they actually even have to physically move it into the US or the US markets, etc to realise the tax benefit.

 

 

[A_P]

43 minutes ago, Harley said:

Ah, that's what Puplava meant in this weekend's podcast when saying that pretty much only retail investors were in the market.  And in index tracker funds - which he seems to see as financial WMDs!  Are these individual investors putting like 90% of their accounts into the market?  At this point?  Are they mad or are they happy dancing close to the exits?

Any data to back that up within his podcast?

This is one of his firms filings

[sancho panza]

16 minutes ago, Harley said:

Heard an interesting snippet from a professional recently that the S&P is also being supported by a lot of overseas money as it's the only market big enough to take such large sums.  So one argument would be it's resilient, but the other is it depends on the fragility of that money - is it debt based (of uncertain tenure), will geo-political events cause it to be withdrawn, etc?  People talk about the Chinese buying US government debt but no-one talks about equity.  Worth a look.  Makes geo-politics key.  As does how much of that overseas corporate profit repatriation is going into the US market (buy backs versus equity purchases) versus elsewhere.  Maybe just sitting in the Eurodollar market, etc as I'm not sure they actually even have to physically move it into the US or the US markets, etc to realise the tax benefit.

 

 

There's a lot we don't know.Hot money flows generally drive bubbles eg London housing-sorry but everything else is noise imho.

There's hot money in the form of foreign funds/buy backs/retail madeness pumping US stocks.Hence I'm leaving well alone until the indicators turn.

The US raising rates has caused chaos.Powell's background has been discussed on here mulptiple times ie he's not neo classical economic academic background at all.That Wolf St piece really highlights that CB's worldwide are starting to understand the damage they've done.It really was a one of his best.

[sancho panza]

32 minutes ago, Harley said:

Worse, there may be no-one to take the bid.  There are only a few big ETF providers in the market - who are they going to sell to?  Gap down, a long way.  Next year may be right.  I'm front running it right now.

Yeah,these structural problems never matter until they matter>I'm with you,I think they'll cause a big gap down event myself.

.I wouldn't want to be long anything I'm not 100% happy to hold into the Big Kahuna and through the other side.

41 minutes ago, DurhamBorn said:

Agree 100%.I very much was old school as were my family.That was until i started dating and seeing families who claimed to be poor pulling in more in benefits than my parents both earned.When my dad was made redundant after 38 years of working the DHS treat him shocking.Our system is so bad now you have to defend your family by learning it.The whole system needs massive reform,but until then its protect your own family the best you can.

Happens all the time,especailly to the self employed when they need help.

[A_P]

As bit of noobi..doing a bit more digging. Am I reading this right? Would this seem like this company are high in index trackers/ETF's?

[Harley]

33 minutes ago, Admiral Pepe said:

Any data to back that up within his podcast?

This is one of his firms filings

I'll go back to his podcasts when I have the time.  Not sure what the filing is showing in terms of how he's structured his business such as discretionary fund manager versus broker, etc.  But the filing shows very little (retail?) cash.  

[Harley]

11 minutes ago, Admiral Pepe said:

As bit of noobi..doing a bit more digging. Am I reading this right? Would this seem like this company are high in index trackers/ETF's?

Is that Puplava's company or something else?  Can't be the full list?  As at date?  I used to look at his filings for sentiment ideas but too much work.  Note he was discussing index (S&P) tracker funds (e.g. the market capitalised ones full of FANG), not necessarily all ETFs, or such as the Vanguard VYM which is a specialist high yield ETF (so no FANG).  Although the VYM does seem to have tracked the S&P.  Actually, maybe I should start looking at his listings again as VYM, holding wise, looks interesting.  If it is Puplava, do you have a link please?

[invalid]

1 hour ago, DurhamBorn said:

Agree 100%.I very much was old school as were my family.That was until i started dating and seeing families who claimed to be poor pulling in more in benefits than my parents both earned.When my dad was made redundant after 38 years of working the DHS treat him shocking.Our system is so bad now you have to defend your family by learning it.The whole system needs massive reform,but until then its protect your own family the best you can.

Woke to this around 20 years ago, its been going on for such a long time now.

Family member had very bad back and knee problems following a slipped disk and then botched surgery to correct it. Some days unable to get out of bed, on others could walk a reasonable distance. Tried for a mobility car, was turned down as too honest when answering questions. A lady in the same street had a 'bad knee', she knew how to play the system and got a car. She was fine and I never saw her have trouble walking and she never mentioned problems with her knee.

Family living in a Council house, due to religion (Catholic) had lots of kids and Council said house was over crowded and they need a bigger house but they didn't have any. Council offered to pay them 25% of the purchase price if they moved out and bought privately. That was a bit of a kick in the teeth as I had just taken on a mortgage and was struggling, I had to take in multiple lodgers to be able to pay the bills.

Then tax credits came along and things went up a level.....

Sometimes I feel like such a mug for having been in full time employment all my life. And now we all know that pensions are next in the firing line - state pension means tested (including property value), rising the state pension age, removal of tax breaks and of course blatant raids by the government.

Still, better the devil you know.

[A_P]

9 minutes ago, Harley said:

Is that Puplava's company or something else?  Can't be the full list?  As at date?  I used to look at his filings for sentiment ideas but too much work.  Note he was discussing index (S&P) tracker funds (e.g. the market capitalised ones full of FANG), not necessarily all ETFs, or such as the Vanguard VYM which is a specialist high yield ETF (so no FANG).  Although the VYM does seem to have tracked the S&P.  Actually, maybe I should start looking at his listings again as VYM, holding wise, looks interesting.  If it is Puplava, do you have a link please?

That's his latest filing (06/30/2018). Not the full listing, just the first page by volume. His brochure is worth a scan too, although I admittedily did only have a very quick skim. Some nice fees and interesting potential exposure for his clients.

I have no idea who this chap is, however have noticed of late a few talking heads/fund managers talking a good game yet seem to find themselves balls deep in ETFs and charging their clietns for the priviledge.

https://www.nasdaq.com/quotes/institutional-portfolio/puplava-financial-services-inc-708537

[Harley]

1 minute ago, Admiral Pepe said:

That's his latest filing (06/30/2018). Not the full listing, just the first page by volume. His brochure is worth a scan too, although I admittedily did only have a very quick skim. Some nice fees and interesting potential exposure for his clients.

I have no idea who this chap is, however have noticed of late a few talking heads/fund managers talking a good game yet seem to find themselves balls deep in ETFs and charging their clietns for the priviledge.

Ta.  I was just looking on the Net.  Things have moved on from my last look when there was just the SEC filings.  I now see several info providers like holdingschannel.com with full holdings listings and position movements.  Although a few months old.  That's the next few hours sorted! 

Indeed, trust no-one!  However, the thing I like about him is he puts quality stuff out there, and has been doing so for some 18 years, for free, is professional about what he says, it's more interview based with opposing views, etc.  Still, only one source though with the usual caveats.  Also, looks like he's transitioning the broadcasting at least a bit to his sons, etc.  I was brought up with him and John Loeffler (who was great) so find the changes uncomfortable.  I find I'm a bit more sceptical these days.  Jim's been through several booms and busts, the new broadcasting crew may not have.  I feel old!

The podcasts are at: https://www.financialsense.com/financial-sense-newshour  and the weekly Technician and Newshour podcasts are free.

I use the podcasts to test my knowledge of the current markets.  I aim to hear nothing new!

[dgul]

2 hours ago, Harley said:

Ah, that's what Puplava meant in this weekend's podcast when saying that pretty much only retail investors were in the market.  And in index tracker funds - which he seems to see as financial WMDs!  Are these individual investors putting like 90% of their accounts into the market?  At this point?  Are they mad or are they happy dancing close to the exits?

I'd expect over 90% of a stockbroker account to be held in stock -- The average on that graph looks to be about 15% and I'm surprised it is as high as that.  You don't keep cash in your stockbroker account, except in the very short term waiting for a next opportunity.  Cash is (should be) kept in different types of account.

[Barnsey]

3 hours ago, sancho panza said:

Priceless....I wodner how accurate the data is and how they got it?

Reminds me of Dough Short's chart on NYSE margin debt.

thanks for keeping positng these tweets and charts barnsey.I'd never come across that except on here.

 

No problem Sancho, feeling energised these days with so much drama going on, note the double top during both previous peaks, if SPX falls from here then it's game on, otherwise blow off top @ 3000 end of the year.

3 hours ago, Admiral Pepe said:

What does client cash refer to? Cash in the clients trading account I assume versus their total net cash position in other accounts?

Correct

[Democorruptcy]

3 hours ago, Barnsey said:

One chart doing the rounds lately...

Have you got a link to the article? Is it one of those zerohedge type scare stories?

One reason why cash in trading accounts might be low is that with the Fed raising rates, spare cash might have been shifted to accounts paying better interest. So the overall net cash position is lower but it doesn't necessarily mean it's all gone into stocks does it?

[Majorpain]

39 minutes ago, Barnsey said:

No problem Sancho, feeling energised these days with so much drama going on, note the double top during both previous peaks, if SPX falls from here then it's game on, otherwise blow off top @ 3000 end of the year.

I aint calling this one after my last US market "predictions" turned out to be bollocks!

Dont mess with QE rocket fueled markets is the lesson...

5 minutes ago, Democorruptcy said:

Have you got a link to the article? Is it one of those zerohedge type scare stories?

One reason why cash in trading accounts might be low is that with the Fed raising rates, spare cash might have been shifted to accounts paying better interest. So the overall net cash position is lower but it doesn't necessarily mean it's all gone into stocks does it?

Thats a plausible theory, although there are also higher borrowing costs stopping debt fueled stock buybacks, to explain why US markets are "turbulent" at the moment.

Gravity is going to be a bitch one day for the FANG's.  (especially Apple and Amazon!).

[Barnsey]

12 minutes ago, Democorruptcy said:

Have you got a link to the article? Is it one of those zerohedge type scare stories?

One reason why cash in trading accounts might be low is that with the Fed raising rates, spare cash might have been shifted to accounts paying better interest. So the overall net cash position is lower but it doesn't necessarily mean it's all gone into stocks does it?

Very plausible @Democorruptcy, chart itself is floating around the Twittersphere, however there is a related article from Zerohedge with different charts. Interesting to see the pattern:

[Harley]

ETF Investors Keep Buying As Wall Street Warns Pullback Coming

Dated 06/09/18

https://www.fa-mag.com/news/etf-investors-keep-buying-as-wall-street-warns-pullback-coming-40698.html

"Oh, it will be October next month, you know, that historically stormy month, so let's put loads of cash into the three biggest S&P passive index trackers"!

[Barnsey]

45 minutes ago, Majorpain said:

I aint calling this one after my last US market "predictions" turned out to be bollocks!

Dont mess with QE rocket fueled markets is the lesson...

Thats a plausible theory, although there are also higher borrowing costs stopping debt fueled stock buybacks, to explain why US markets are "turbulent" at the moment.

Gravity is going to be a bitch one day for the FANG's.  (especially Apple and Amazon!).

Very wise @Majorpain, thing is this is now fuelled by temporary tax cuts (to offset significant QT) and ironically strong $, neither of which can probably continue beyond next summer. US stocks very much last (wo)man standing scenario at the moment. I'm nowhere near arrogant or "smart" enough to make trading calls, just absorbing a significant range of opinions day in day out (unhealthily so TBH)

@foimbert 

@carlquintanilla

@luca_paolini

[A_P]

looks like this was the article and then regurgitated by zerohedge

https://www.bloomberg.com/news/articles/2018-09-28/blowout-quarter-for-stocks-has-mom-and-pop-all-in-pros-cautious

https://www.zerohedge.com/news/2018-09-30/schwab-cash-levels-hit-all-time-low-retail-investors-flood-market

and another article from December

https://www.marketwatch.com/story/stock-optimism-swells-as-sp-500-hits-most-overbought-level-in-22-years-2017-12-27?link=sfmw_tw

 

[Harley]

ETFs See Sept. Tsunami Of New Assets

October 01, 2018

https://www.etf.com/sections/monthly-etf-flows/etf-monthly-fund-flows-september-2018

September US Equity was 28% of the YTD US Equity total, and 76% of total September net inflows.

[MrXxx]

4 hours ago, DurhamBorn said:

Agree 100%.I very much was old school as were my family.That was until i started dating and seeing families who claimed to be poor pulling in more in benefits than my parents both earned.When my dad was made redundant after 38 years of working the DHS treat him shocking.Our system is so bad now you have to defend your family by learning it.The whole system needs massive reform,but until then its protect your own family the best you can.

Agree, to not get some of the benefits now puts you at a disadvantage, and people don't respect you for it, they consider you a fool.

As SP stated above, eventually it will `break`, and it will only be at this stage that people will value/respect it, the way they did when it was ` born`

[A_P]

1 hour ago, Barnsey said:

Very plausible @Democorruptcy, chart itself is floating around the Twittersphere, however there is a related article from Zerohedge with different charts. Interesting to see the pattern:

manually sourced from 10k's

[Democorruptcy]

1 hour ago, Barnsey said:

Very plausible @Democorruptcy, chart itself is floating around the Twittersphere, however there is a related article from Zerohedge with different charts. Interesting to see the pattern:

I'm not suggesting markets aren't overvalued, it's just that I've become very untrusting. When I see a chart now I see what THEY want me to think, so I start looking for other reasons behind it. The first step is usually to look at the axis.

[leonardratso]

the axis of evil.