Print-Or-Panic, TrimTabs On The Market's Meltup
As retail investors continue to appear significantly pessimistic in their fund outflows ($7.1bn from US equity mutual funds in w/e January 4th - the largest since the meltdown in early August) or simplystuff their mattresses, David Santschi of TrimTabs asks the question, 'who is pumping up stock prices?' His answer is noteworthy as a large number of indicators suggest institutional investors are more optimistic than at any time since the 'waterfall' decline in the summer of 2011. Citing short interest declines, options-based gauges, hedge fund and global asset allocator sentiment surveys, and the huge variation between intraday 'cash' and overnight 'futures market' gains (the latter responsible for far more of the gains), the bespectacled Bay-Area believer strongly suggests the institutional bias is based on huge expectations that the Fed will announce another round of money printing (to stave off the panic possibilities in an election year).
It's interesting we see talk of a trillion dollar QE3 being floated in the same week that a trillion euro LTRO for the end of Febuary is also the subjecct of speculation. but in the absent of retail investors , the source of funds for the so called " investors " is the print like mad Central Banks !
Eurointelligence Daily Briefing: The IMF wants $500bn in new funds, but non eurozone shareholders resist
ReplyDeleteThe IMF has asked for an additional $500bn in funds, which would raise its total loan volume to €1 trillion; eurozone pledges $200bn towards these funds, but US and other non-eurozone member states are sceptical; China says it would make its agreement conditional on a fundamental rebalancing on voting power; the non-eurozone countries have reached consensus that the eurozone is financially strong enough to take care of its problems; Greek PSI+ talks continued amid some renewed optimism that an agreement can be reached by the end of this week; Angela Merkel and Nicolas Sarkozy are pushing ahead with a financial transactions tax; they also want to establish a European growth and competitiveness fund; Wolfgang Schäuble and Francois Baroin are working towards harmonising corporate tax rates and tax bases; Angela Merkel rebuffs Mario Monti's call for more help, saying she is not clear about what Germany should do; Frankfurter Allgemeine says the ratings downgrade severely constrains EFSF's capacity to act; Spain proposes Antonio Sainz de Vicuna, the ECB's legal counsellor, for the ECB's executive board; Dieter Wermuth calculates that the eurozone's banks need about €1 trillion in new capital; Bank of America/Merrill Lynch have come out with a calculation with shows a great dependence of the eurozone's internal imbalances on the oil price; Luigi Zingales, meanwhile, argues that the ECB's liquidity operations are not enough, and that the ECB still needs to loosen monetary policy.
Interesting that the banks in europe need a trillion to recap in light of the rumored one trillion LTRO for Febuary....