On or Off The Sideline?
At Heisenberg's Lay Of The (Liquidity Barren) Land....
This begs the question, how much of that "cash" is a safety cushion? How much is already "pledged" as collateral or otherwise. How much is leveraged etc? Thus, how much is actually waiting "ON the sidelines" is debatable. Moving West...
To answer the question of how much is "ON the sidelines", time to employ our favorite lex parsimoniae, it's all about the money and to find motive, always follow the money? We need to know...
Speaking of which... one must find liquid deposits that are NOT in the stock market. March 2019 Current Z1 release - all numbers in Trillions
$12.220 time and savings deposit (liability) - L.205 Line 1
$4.535 checkable deposits and currency (liability) - L.204 Line 1
$3.038 money market funds (assets) - L.206 Line 1
Total = $19.7 divide by current market "value...
All sectors; corporate equities; asset - L.223 Line 1
Current stock market "valuation" = 42.9
Rounded, .46 cents sitting out "ON the sidelines" for every $1 already in. Sounds like an opportunity? Of course the Fink's of this world are disappointed in all that money they can't gleep another mansion and yacht off of while chanting AUM (assets under management) and smoking OPM (other peoples money).
Thus, the same amount of "cash" is still on the sidelines, as are "shares" in the market. viz. only the assets changed hands, and the result is net ZERO. More on that later.
At the end of the day, in contrast to "ON the sidelines" which can be somewhat quantified, the much ballyhooed effect of coming "OFF the sidelines" is a fallacy of composition as old as the hills. Who falls for such a fallacy? Usually those who don't know a debit from a credit. (Shout out to Salmo Trutta.)
And in keeping with our favorite lex parsimoniae, of course, the net ZERO excludes TRANSACTION FEES for all the RAT FINK's or gleeper's of this world who would have one think otherwise. Deserving of another look for Lebowski? Perhaps we think....
Recommended Reading: No Such Thing As Cash On The Sideline - John Hussman
@kimbillro "The problem is there is $8T on the sidelines. According to Larry Fink retail has been selling the rally."
@chickenbone "I am sick of people talking about "money on the sidelines". There is NO money on the sidelines. That is one of your Wall Street broker's tricks to get you to buy, convincing you there are many greater fools than yourself just poised to buy. Hogwash!!"The Nattering One muses... Tricky indeed. In the past, Fink's Blackrock has given estimates of $50T to $70T in global "ON the sidelines" cash awaiting an opportunity to buy. For our purposes "ON the sidelines" could describe savings, checking and MMF's.
This begs the question, how much of that "cash" is a safety cushion? How much is already "pledged" as collateral or otherwise. How much is leveraged etc? Thus, how much is actually waiting "ON the sidelines" is debatable. Moving West...
To answer the question of how much is "ON the sidelines", time to employ our favorite lex parsimoniae, it's all about the money and to find motive, always follow the money? We need to know...
Speaking of which... one must find liquid deposits that are NOT in the stock market. March 2019 Current Z1 release - all numbers in Trillions
$12.220 time and savings deposit (liability) - L.205 Line 1
$4.535 checkable deposits and currency (liability) - L.204 Line 1
$3.038 money market funds (assets) - L.206 Line 1
Total = $19.7 divide by current market "value...
All sectors; corporate equities; asset - L.223 Line 1
Current stock market "valuation" = 42.9
Rounded, .46 cents sitting out "ON the sidelines" for every $1 already in. Sounds like an opportunity? Of course the Fink's of this world are disappointed in all that money they can't gleep another mansion and yacht off of while chanting AUM (assets under management) and smoking OPM (other peoples money).
Gleep: A slang term meaning purloin, filtch, rifle; in short, steal. Slang for skill. Usually in the context of an individual who completely outshines his opponents as if he as stolen their abilities and skills. A gleeper is one who gleeps.Hurry, hurry, step right up ladies and gentlemen... a gleep might infer that all that money "ON the sidelines" will affect price increases as it comes "OFF the sideline". Unfortunately for the gleeps, stock prices don't change because of market inflows or outflows. Prices change because either buyers (pay premium) OR sellers (liquidate) are more eager to transact.
Equilibrium: - all securities issued must be held; every share bought by someone must be sold by someone else.Bottom line, whatever $ amount comes "OFF the sidelines" to BUY, an equal $ amount must be SOLD resulting in... A cash debit for the buyer, and an offsetting cash credit for the seller. More on that later.
Thus, the same amount of "cash" is still on the sidelines, as are "shares" in the market. viz. only the assets changed hands, and the result is net ZERO. More on that later.
At the end of the day, in contrast to "ON the sidelines" which can be somewhat quantified, the much ballyhooed effect of coming "OFF the sidelines" is a fallacy of composition as old as the hills. Who falls for such a fallacy? Usually those who don't know a debit from a credit. (Shout out to Salmo Trutta.)
And in keeping with our favorite lex parsimoniae, of course, the net ZERO excludes TRANSACTION FEES for all the RAT FINK's or gleeper's of this world who would have one think otherwise. Deserving of another look for Lebowski? Perhaps we think....
Recommended Reading: No Such Thing As Cash On The Sideline - John Hussman
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