por Fenix » Vie Feb 06, 2015 8:21 pm
Tyler D.: It's A Bond Picker's Market: Bond Funds Have Biggest Inflow In History
Remember the "great rotation"? Neither do we, because the bank that year after year coined the term to prepare investors for a renormalization of the economy as bond yields rise alongside stocks (something that happens in any normal, non-centrally planned banana world), that would be Bank of America for anyone confused, just reported that in the latest week, EPFR data showed inflows to all fixed income funds of $16.04 billion – the highest on record going back to at least 2008. On the "other side of the spectrum were stocks that had $5.52bn of outflows, down from a $1.62bn inflow in the prior week." And just like that, it's a bond-pickers' market, even as central banks trade with each other in various dark pools to keep global equities, and thus confidence, stable even as the capital tsuniami screams deflation for years to come.
BofA: Mutual fund and ETF flows are catching up to the January collapse in interest rates. Recall that flows typically flow returns, but with a lag. Hence following the very strong bond returns in January last week’s inflow to all fixed income funds was $16.04bn – the highest on record going back to at least 2008. Interestingly, the second largest weekly inflow of $14bn happened during the week ending February 5 2014 – also following a precipitous decline in yields (and a sell-off in stocks) in the prior month of January. Inflows to bond funds were strong across sectors. Inflows to high grade jumped to $6.14bn from a $3.29bn inflow in the prior week. Treasury funds reported a large $5.12bn inflow. Inflows to high yield stayed very strong at $2.94bn. EM bond funds saw a $0.88bn inflow after reporting a small outflow in the prior week. Finally, muni fund inflows remained robust at $0.89bn.
At the other site of the spectrum were stocks that had $5.52bn of outflows, down from a $1.62bn inflow in the prior week. Loan funds continued to report outflows, totaling $0.38bn last week. Money market funds also reported outflows of $20.11bn. Finally, note that the weekly reported inflows to high grade funds could be affected by PIMCO-related flows. PIMCO flows are not included in the weekly data, but some of the offsetting inflows are included, thus biasing the weekly high grade flow data higher.
It almost makes you wonder without central banks and corporate buybacks where the S&P 500 would be...
Stocks, Bond Yields, & The Dollar Surge On "Good News Is Good News" Jobs Report
It would appear "good news is good news" this morning as better-than-expected payrolls data (but the unemployment rate rose so they'll need to spin that) has sent stocks higher, bond yields higher-er, and the US Dollar higher-est. PMs are weaker, crude is sideways. EURUSD is back under 1.14 as the week's volatility continues.
Saudis Re-Unleash Oil Weapon, Slash Asia Prices By Most In 14 Years
"This is further evidence that they are hellbent on protecting their market share in China," warns one strategist as just when US talking-heads thought things were 'stabilizing' Saudi Aramco slashes its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks - the biggest discount in 14 years. As Bloomberg reports, the desert kingdom is continuing to fight for market share, and using the oil weapon by "trying to stay competitive in what is the biggest area of growth," as Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia.
China’s Monumental Debt Trap - Why It Will Rock The Global Economy
Needless to say, Greece is only the poster child. The McKinsey numbers above suggest that “peak debt” is becoming a universal condition, and that today’s Keynesian central bankers and policy apparatchiks are only pushing on a giant and dangerous global string. So now we get to ground zero of the global Ponzi. That is the monumental pile of construction and debt that is otherwise known on Wall Street as the miracle of “red capitalism”. In truth, however, China is not an economic miracle at all; its just a case of the above abandoned Athens stadium writ large.
"We Just Need To Print More Money" Bank Of Japan's New Board Member Clarifies Endgame
The Abe administration nominated a major proponent of reflationary monetary policy to the central bank’s board, buttressing Governor Haruhiko Kuroda’s efforts to save the nation from the dread of deflation. As Bloomberg reports, economist Yutaka Harada, who will replace Ryuzo Miyao, has said Japan can beat deflation by printing money in a 2013 book "Reflationary Policy Revives Japan’s Economy." So far that is not working so try harder... “The nomination is a good news for Kuroda... he will keep a majority on the board and win what he wants." Why such good news? As deputy director at the finance ministry’s Policy Research Institute, Harada exclaimed, "we just need to print money."
Consumer Credit Growth Misses: Revolving Credit Surges As Student, Car Loans Have Weakest Increase Since February 2012
Following a significant downward revision to November's data, December consumer credit growth printed a gain of $14.755 billion, missing expectations of $15 billion (for the 5th month) and hovering near one-year lows. The most notable aspect was the $5.77 billion surge in revolving credit (e.g. credit cards) as Americans extended and pretended into the holidays - the biggest rise since April.
A Modest Proposal To Save The World
What any student with an eye to getting on in the world should realize is the core truth underpinning right-minded economic analysis: the value of assets in a properly constituted economic system is a direct function of the money created by the central bank. All other knowledge is subsidiary to this key insight. I know this to be true because the great minds of Princeton declare it to be so, and who am I to argue? This insight results in the key truth that money equals value. It therefore follows that the more money that is created, the more value there is in the system. As the discoverer of these great truths, Lord Keynes has clearly shown this to be true... but there is another way.