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Margin Debt Soars To Highest Levels Since September 2008

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So this, in part, explains the cries to get retail investors - i.e. Joe Public - back into shares.

It also explains the rise of the markets but now the funds have run out of funny money, or are fast running out, the question is how much longer will the stocks remain bullish?

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(if everyone's already got one, who's left to sell to?)

I suspect there are plenty of people who have sat out the past 12 months... the past 21 months... who read the S&P/Dow bear articles at the end of 2009 saying that markets will crash in 2010... and who waited... and waited... and waited... and who will now be tempted to get into the markets now...

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I suspect there are plenty of people who have sat out the past 12 months... the past 21 months... who read the S&P/Dow bear articles at the end of 2009 saying that markets will crash in 2010... and who waited... and waited... and waited... and who will now be tempted to get into the markets now...

bubble behaviour explained.

time to leave the party.

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I suspect there are plenty of people who have sat out the past 12 months... the past 21 months... who read the S&P/Dow bear articles at the end of 2009 saying that markets will crash in 2010... and who waited... and waited... and waited... and who will now be tempted to get into the markets now...

Induhvidials (to borrow Scott Adams' word) don't set price in equities - rather, it's what their fund manglers (and specifically pension fund manglers) do that matters.

And the fund managers have piled back in (which is largely what the OP is about) - see the balance in the survey since September.

The market is well and truly over-egged - it'll be looking for reasons to sell when liquidity returns in the new year.

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Induhvidials (to borrow Scott Adams' word) don't set price in equities - rather, it's what their fund manglers (and specifically pension fund manglers) do that matters.

And the fund managers have piled back in (which is largely what the OP is about) - see the balance in the survey since September.

The market is well and truly over-egged - it'll be looking for reasons to sell when liquidity returns in the new year.

EURJPY is my "tell". If it stays well below 110 when market liquidity returns in the New Year, things might get a bit tricky for equities. I have been underweight equities relative to my target asset allocation for the last 1,000 Dow points though so best to ignore me .....

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IRRO you are one cynical f****r.

I've had years of practice :lol::lol:

The Ben Bernanke appears to be totally fooked, he's got himself into a deep hole and just keeps on digging. The more free money he gives out the bigger the bets get made ensuring he has to keep printing free money otherwise the folly of his actions get revealed and the system collapses.

Unless he manages to create new productive capacity in the US he's screwed.

Next he'll be printing money for the City municipals that have run out of cash.

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So this, in part, explains the cries to get retail investors - i.e. Joe Public - back into shares.

It also explains the rise of the markets but now the funds have run out of funny money, or are fast running out, the question is how much longer will the stocks remain bullish?

"If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy."

Warren Buffett

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every hedgie troll and his dog wants the deckchair swapping to continue until they can get the traditional sucker of last resort-the retail investor,back to the poker table.

The only problem is that the retail investor has problems of his own ie mortgage,redundancy,non mortgage debt,and having been burned badly in the internet bubble,and then watched all those big divi paying banks go to f*** all,he/she's learned the lesson,that by the time the advisers are selling you niche fund(be it CRE or biotech),the good times are already over.

as i put on a different thread this morning

I wouldnt be suprised if the smart money has started moving out, its noticeable that despite this supposed money flow in, the Indian, Chinese and Hang Seng are diverging against the western indices (the hang seng in particular which has been a leader this whole 18 month global equity rally, its failure to reach new lows in March 09 (it bottomed in Nov 08) whilst western indices were was a strong diverging confirmation that the 07/08 equities downleg was ending in March 09) , their tops remain the early november highs, these are the potential little clues its good to notice when validiting certain market moves.

there are probably only days remaining (although ive thought that for a couple of weeks, not that it has actually gone anywhere since then), but if it breaks it should be quite hard. Im actually watching the CHF because it is my base currency, it looks to me as if its bull market of this year against GBP/USD is coming to an end right about now and GBP should rally against it about 20%, i dont know what the driver of this might be but technically it looks good, i think when the CHF starts falling the markets will fall with it, but like i say i dont know what will drive it

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http://uk.finance.yahoo.com/news/Global-markets-slide-second-tele-939696626.html?x=0

'World markets (Xetra: A0NJ8B - news) fell for a second day on Tuesday as investors remained wary about the impact of an interest rate rise in China on the global recovery as they awaited the release of key US home price data later in the day.'

Chinese rate rise Christmas day got very little coverage.

yep i saw that but its been pish poor for a month after a quick sell off in early November, like i say its been on fire for the last 18 months

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things might get a bit tricky for equities

Understatement of the year.

Imagine your index of choice as an enclosed space with exactly one way to either enter, or leave.

Imagine a doorman standing outside, and another inside.

When the enclosed space is empty, the doorman charges next to nothing for the privilege of entering - as it fills, he hikes his fee.

The man inside offers a rebate for leaving - next to nothing when the space is empty, rising as it fills.

In the present part of the cycle the queue outside the space is exhausted and the space is completely full.

The last few entrants have borrowed the money they needed to pay the fee.

(as a sidebar one should always remember that the sentiment survey linked does not continue to survey those who have departed their profession - due to a lack of salesmanship in the prior quarter, or any other reason)

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The most viable rationale I've seen to date for end of year index valuations being what they are is that many of the largecap corporates (and for that matter prop funds) are sitting completely in cash (viz the explosion in excess reserve balances worldwide).

fredgraph.png

These fools may prove to be greater than the entire fund industry combined.

But I wouldn't count on it - we have exactly the right conditions for corporate ram-raiders to trap the lot in their tar-pits, before these mammoths move.

Edited by ParticleMan

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The most viable rationale I've seen to date for end of year index valuations being what they are is that many of the largecap corporates (and for that matter prop funds) are sitting completely in cash (viz the explosion in excess reserve balances worldwide).

fredgraph.png

These fools may prove to be greater than the entire fund industry combined.

But I wouldn't count on it - we have exactly the right conditions for corporate ram-raiders to trap the lot in their tar-pits, before these mammoths move.

Why are largecap corporates sitting comfortably in cash fools? If you believe the markets are about to undergo a serious correction then being in cash is the sensible place to be.

Corporate ram-raiders, tar-pits - you have lost me now. A bit hard to corporate ram-raid a cash rich largecap corporate.

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Why are largecap corporates sitting comfortably in cash fools?

Sitting in cash ensures you will pay the highest price to capture whatever innovation runs rings around you next.

If you believe the markets are about to undergo a serious correction then being in cash is the sensible place to be.

Entities which will sell at maximum valuation to these same corporates are deep in their R&D cycles today.

Corporate ram-raiders, tar-pits - you have lost me now. A bit hard to corporate ram-raid a cash rich largecap corporate.

Remarkably easy - convince a lender to capitalise a leveraged buyout.

If they in turn can leave one of said corporates or funds holding the junk debt resulting from this, they'll go for it - liquidating a cash rich corporate throws off huge fees (see RJR Nabisco for a basic play guide).

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...as the reverse decoupling thesis is now the prevalent paradigm...

Like something Data in Star Trek would say.

Yet the same question from a valuation standpoint shows that Chinese stocks, on virtually every multiple (EV/EBITDA, EV/Revenue and P/E), are still materially overvalued compared to the US.'

So China is down 1.7% in a matter of hours, 15% down since the first week of Nov but that Chinese shares still make US stocks look cheap.

With that kind of thinking people will be writing off any more 15% falls in China as not affecting the US. Dow is special.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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