Panic Selling, Just Getting Started?
Last Friday, I found this comment in a financial news snippet...
As Nattered Feb 9, 2:47PM
Roamer – "At what point would you expect panic selling to set in?"
Nattering... When the retail idiots wake up and realize they been had. Long ago, we addressed the fallacy of platform value...
In the 1929, 2000 and 2009 collapses all the money was in the banks. Today, there are over $3T in ETF's with fund inflows accounting for over 50% of that total in the last year.
As money flows in and out of the fund, regardless of liquidity or quality the managers are required to buy and sell the underlying stocks in the same proportion as their index representations.
Transacting mindlessly indeed, in the last two weeks amidst forced pile in selling by index funds, some owning up to 20% of all outstanding issues, SP futures hit 2540.
The late day plunges into the close could be an affect of volatility. During high volume most fund redemption orders cannot be processed until the end of the day.
All kinda puts and contrarian calls payin out like a mattress back Sunset Blvd slot machine. To repeat…
Now oil and equities in the process of collapsing. This is just a prelude, you could say this?
Naybob Feb 9 2:58PM
Winston - "Panic selling has already started. I'm more worried about the psychotic selling that is just around the corner. This is the eyes wide shut collapse. Everybody and their dog knew it was going to happen, but too scared to call out a timing on this (long gone) excessive rally, for the fear that excess, well, knows no excess.
Nattering... Eye's Wide Shut, you tell it like it is.
Stockbern – "Jabo, not a disaster week, imo. I've been waiting for this since Nov. 2016. ?Realistically been waiting since we cashed out in December"
Nattering... Realist, be patient. Way overdue and too many reasons to list in a single post, many crumbs were dropped in the forest, where nobody or their Mother could see the trees.
Again, our theme for the week is Reasons For A Market Dip? More to come in Reasons For A Market Free Fall? And you could also say this?
While many are still trying to pin an exact reason to the selloff and wild swings...Regarding said comment, not knowing whether to laugh due to the attempt at humor? Or cry as to the clueless nature? inspires our Nattering theme for this week.
As Nattered Feb 9, 2:47PM
Roamer – "At what point would you expect panic selling to set in?"
Nattering... When the retail idiots wake up and realize they been had. Long ago, we addressed the fallacy of platform value...
As the stock price rises, the increased market cap weight forces index funds who already hold the component, large and small, to buy more of the company shares. Ceteris paribus, value investors buy more as prices decline, while market cap weighted index funds do exactly the opposite, buy more of what they already hold, at prices rising higher and higher.and... CapitalOne ask's "What's In Your Wallet?" We Nattered: Ask not what's in your wallet? Ask "What's In My Fund?" because it is different this time viz. what liquidating ETF's face in in today's market...
Where banks have shrunk their balance sheets, shadow banking has filled the void, effectively putting everyone in the same operating pot. Shadow banks are NOT banks, do not offer demand deposits and instead obtain funding in wholesale money markets such as commercial paper or repo. Funds are NOT banks. Risk has been shifted from the banking system to capital market investors...What reserve requirements? What liquid deposits? What deposit insurance? What backstop? And now your moment of Zen... it is different this time.
In the 1929, 2000 and 2009 collapses all the money was in the banks. Today, there are over $3T in ETF's with fund inflows accounting for over 50% of that total in the last year.
As money flows in and out of the fund, regardless of liquidity or quality the managers are required to buy and sell the underlying stocks in the same proportion as their index representations.
Transacting mindlessly indeed, in the last two weeks amidst forced pile in selling by index funds, some owning up to 20% of all outstanding issues, SP futures hit 2540.
The late day plunges into the close could be an affect of volatility. During high volume most fund redemption orders cannot be processed until the end of the day.
All kinda puts and contrarian calls payin out like a mattress back Sunset Blvd slot machine. To repeat…
Since mid Dec. Yen gaining on the dollar, tight liquidity. Baltic dry shipping, bond yields, money supply, interbank lending, commercial and industrial lending, all TANKED.These are all proxies of systemic economic growth, which have NOTHING to do with the markets? Sounds good, they can only continue to go up under false pretenses? Where's your sign sucker? Somebody woke up and said, time to hit the exit or eject button?
Now oil and equities in the process of collapsing. This is just a prelude, you could say this?
Naybob Feb 9 2:58PM
Winston - "Panic selling has already started. I'm more worried about the psychotic selling that is just around the corner. This is the eyes wide shut collapse. Everybody and their dog knew it was going to happen, but too scared to call out a timing on this (long gone) excessive rally, for the fear that excess, well, knows no excess.
Nattering... Eye's Wide Shut, you tell it like it is.
Stockbern – "Jabo, not a disaster week, imo. I've been waiting for this since Nov. 2016. ?Realistically been waiting since we cashed out in December"
Nattering... Realist, be patient. Way overdue and too many reasons to list in a single post, many crumbs were dropped in the forest, where nobody or their Mother could see the trees.
Again, our theme for the week is Reasons For A Market Dip? More to come in Reasons For A Market Free Fall? And you could also say this?
Comments