ND JAN 19 20
SIT EC y POL
ND denounce Global-neoliberal
debacle y propone State-Social + Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is
over. Financiers know it, they documented with graphics
"What we do not know for sure is
whether there comes a point well before 100% of all investing is done
passively, or before all public equity is taken private, that the market price becomes
meaningless."
Looking
“I look
at historical relationships that appear to no longer operate as before,” said
the investor. “I look at measures of valuation that are stretched to levels
rarely seen,” he continued.
"I
look at corporate share buybacks as the only meaningful inflow. I look at
outflows from retail investors and the flags that this raises."
"Then I look at the fact
that global interest rates have never been negative like this. I look at the
working population and it has never before aged and shrunk like this."
"And I look at the world and just don’t know
how anyone can be certain of anything."
Anecdote:
"If 100% of all investing is passive, then the
information contained in market prices is meaningless,” continued the CEO of one of the industry’s
largest investment firms. In 2009, assets in actively-managed mutual
funds were 3x those of index-based funds/ETFs. In
August 2019, US index-based fund/ETF assets surpassed actively managed assets.
That trend continues.
See chart:
Passive
fund AUM rose over 480% since 2010 vs.
179% for active in Sep 25, 2019
With each incremental dollar
that moves from active to passive management, roughly five more cents flow into
equities (active managers hold 5% cash buffers while passive funds generally do
not).
Of that allocation, private
equity investments have surged to 25% of the assets, up from 18% in 2018. Private equity funds have $1.5trln
in dry powder that will fail to pay fees unless their managers buy equity,
which continues to appreciate.
You see, in a world where all
investing is passive, how much would an incremental $1bln inflow move market
prices up? How about a $1bln outflow? The price moves would become utterly extraordinary in such a world. And
in a world where all public equity is taken private, PE
managers would surely mark their holdings steadily higher, to ever more extreme
multiples.
"Nor do we know whether we
have already reached that point."
….
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...and the price cuts didn't
do much to improve sales, which
fell by 12%...
...almost all housing in Greenwich is now selling for discounts to the sticker price. 90%
of single family deals that closed in the fourth quarter were for less than
what the seller was asking, according to Bloomberg. This marks the biggest percentage
of deals dating back to mid 2017.
The average discount to the asking price was 9.6%, according to appraiser Miller Samuel Inc. and
brokerage Douglas Elliman Real Estate.
But
the best news is that the price cuts didn't do much to improve
sales, which fell by 12% from a year earlier to 117. However, they did contribute to adecline in Greenwich's listings - the biggest decline
since Q1 2017 - as owners refused to discount their
properties.
See Chart:
Major
Markdowns
Dealmaking hasn't increased in
any of the last five quarters, but low mortgage rates still have buyers on the
prowl for value. Contracts at the end of the year pricked up slightly, which
could suggest a stronger Q1 on its way. As of Dec. 31, there were 74
transactions pending, which is up 54% from the year prior.
David
Haffenreffer, manager of the Greenwich office of Houlihan Lawrence: “At
the right price there’s always an audience.”
See Chart:
Slimer
Stockpile
It was the largest increase for any neighborhood,
but was the area where the buyers also got the largest discounts.
The neighborhood was also home
to the biggest sale of the quarter, after the owners of an estate took a 45% haircut
from a price they paid in 2010. The estate sold once
belonged to Mel Gibson and sold last month for $13.25 million after being on
the market for seven years.
….
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"Last year’s unusual
deleveraging in NYSE margin accounts in a strong equity year, coupled with the
unusual selling of equity funds, raise the possibility that retail investors
are more motivated by rebalancing rather than responding to long-term
momentum." - JPMorgan
Readers will recall for much of
2019 we
highlighted what we said was the market's
biggest paradox: one where the
higher the market rose, the more money investors would pull out of equities,
and allocate to bonds.
See Chart:
It culminated
last June when , even as the S&P hit new all time highs, outflows
over the last 6 months in dollar terms surpassed the previous record observed
over any prior 6-month period.
See Chart:
Global
Equity Funds flows ($Bll , 6m Sum)
There is just one problem:
despite the market's continued meltup, this has so far failed to materialize,
and as JPM derivatives strategist Nick Panagirtzoglou writes in his latest
Flows and Liquidity report, "is the flow picture over the past few weeks
consistent with the Great Rotation II thesis? The answer is not yet "because whether one looks at YTD fund flows or the flows over
the past month or two, the picture
is of continued strong flows into bond funds and of only modestly positive
flows into equity funds.
See Chart:
Flows
by weekly and monthly reporting equity
and Bonds Funds
As shown in the chart above,
the trend so far is hardly a ringing endorsement of a second Great Rotation out
of bonds and into stocks despite
the market making new all time highs on a daily basis.
"WHAT
COULD MAKE THE GREAT ROTATION THESIS FAILING TO MATERIALIZE THIS YEAR?"
To answer this question the
derivatives expert says he needs to think about the factors for and against the
Great Rotation thesis. In terms of the supporting factors, he had mentioned
three main factors in our previous publication of November 22nd. This is what
JPM said then:
1)
Historical patterns based on previous year’s equity/bond performance and
on previous year’s extremity in equity and bond fund flows, pointed to a big
change in fund flows this year - at least according to JPM if not this website
which has argued for years that the biggest buyer of stocks is not retail or
institutional investors but corporate buybacks
See Chart:
Who is buying equities… Corporates
2) An improving macro picture. Further signs of an improvement
in the global industry cycle into 2020 should also encourage a rotation from
bond funds to equity funds. The upward trajectory in orders and inventories
since the flash PMIs of October 24th has been so far underpinning this
improving macro picture. Next week’s flash PMIs will be important in gauging
whether this improvement trend continues.
3) The third supporting factor JPM had
mentioned is the global yield backdrop across asset classes. Following last year’s rate cuts
by central banks, cash and bonds yield significantly less than before and
significantly less than equities. So in the absence of negative surprises it
would be difficult for retail investors or other asset allocators to ignore the
yield advantage of equities and not accept ever higher equity weightings.
See Chart:
Equity Yields vs. bond and cach yields
What about the factors against
Great Rotation (which as regular readers
may recall, we said
would not happen around
the time JPM made its "contrarian" call, for the simple reason that
there is little impetus to keep selling bonds).
This proxy is shown
in Figure 4 for funds domiciled in the US since 1996 and funds domiciled
worldwide since 2005. This equity fund share, extrapolated to January 16th by
the dots, looks even
more elevated after the equity rally of the past few months and currently stands
at record high levels for funds domiciled worldwide and very close to record
high levels for funds domiciled in the US. Said otherwise, this confirms what we said earlier, namely that retail
investors are indeed "all in" US stocks to a never before seen degree.
See Chart:
Equity shares as % of all funds AUM
Continue
reading and see more charts at:
SOURCE: https://www.zerohedge.com/markets/jpmorgan-maybe-we-were-wrong-about-main-reason-be-bullish-2020
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US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
If you hated Bush v. Gore, this could be one sequel that you will not want to see...
====
"Expanded trade with China in
the 2000s contributed to the loss of tens of thousands of American factories
and millions of manufacturing jobs and the hollowing out of many communities.
What followed was an associated rise in the rates of divorce, drug addiction,
crime, depression and death."
====
Oficial “trampist note” 1?
“Leave California or bust!”
====
Another one:2?
McConnell is once again proving he's a more effective leader
than Pelosi...
….
th teakettle
is burning.. not water inside.. only smoke.. will d house b burned?
====
The worse one: 3
"This is a distraction."
====
"That's
what happens when you vote for
Democrats, they will take your guns away."
====
US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China,
RU, Iran search for State socialis+K-, D rest in limbo
Little progress towards truce made,
but Merkel caught on camera in awkward moment frantically looking for
Putin...
====
“In some ways, this troubling trend
is reminiscent of the early part of the 20th century..."
====
SPUTNIK
and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
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NOTICIAS
IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
VIENTO SUR
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RT EN ESPAÑOL
Sistema de
defensa antiaérea repelen ataque de drones contra base militar rusa en Siria. https://actualidad.rt.com/actualidad/340369-sistemas-defensa-antiaerea-repelen-ataque
Evo Morales
y dirigentes del MAS anuncian el binomio para elecciones del 2020 https://actualidad.rt.com/actualidad/340371-evo-morales-dirigentes-anuncian-binomio-elecciones
Conferencia
de Berlín acuerda amplio plan de arreglo del conflicto libio. https://actualidad.rt.com/actualidad/340361-participantes-conferencia-libia-berlin-acordar-plan-arreglo
Ministro
alemán se opone al US sobre Irán:
"No queremos una tormenta de fuego en Oriente Medio". https://actualidad.rt.com/actualidad/340346-ministro-alemania-criticar-politica-eeuu
Méx permite
ingreso controlado de migrantes y les ofrece empleo. https://actualidad.rt.com/video/340378-mexico-permitir-ingreso-controlado-migrantes
VEN y Cuba
afianzan cooperación binacional a pesar de las agresiones del US. https://actualidad.rt.com/video/340374-venezuela-cuba-afianzan-cooperacion-binacional
El
Zoom: Pacto nuclear: agonía atómica. https://actualidad.rt.com/programas/zoom/340157-pacto-nuclear-agonia-atomica
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GLOBAL
RESEARCH
Geopolitics & Econ-Pol
crisis that leads to more business-wars from US-NATO allies
- Court
of Appeal of Turin Confirms Link Between a Head Tumour and Mobile Phone Use By Equipe Phonegate
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ASIAN
NEWS
Press TV
- Billionaires richer than 60 percent of world's population: Oxfam
- SARS-like virus spreads in China, nearly 140 new cases
- Gunman kills two Hawaii police officers
- Morales announces candidates for MAS party in Bolivia's elections
- Foreign powers call for 'permanent' Libya ceasefire
- Italian Sardines square off against Salvini
- ‘US House Dems to call witnesses if Senate doesn’t’
- ‘Commercial banks owe $15.5 bn to Iran’s central bank’
- Araqchi: EU3 cannot activate JCPOA dispute settlement mechanism
- Tehran to Macron: Gulf located south of Iran is Persian Gulf
- Iran says will soon launch Zafar satellites into orbit
- SARS-like virus spreads in China, nearly 140 new cases
- PROGRAMS
- Algeria after Bouteflika
- The fox
- Anti-Trump sentiment
- Trump tax returns
- G7 summit
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