Staring into a void, investors pull cash from harm's way

Yahoo Finance ^ | 20 Aug 15 | By Michael Santoli

[SkyPilot]

If nature abhors a vacuum, investors aren’t so crazy about them either.

It’s hard to avoid all the voids right now. The August Wall Street vacation evacuation is well underway, markets are facing an absence of inflation, huge air pockets underneath commodities and emerging-market currencies – and a vexing lack of clarity about what the Fed might do in less than a month’s time.

The collective response to this environment devoid of strong conviction has been to pull cash out of riskier markets and wait. Barclays Capital says more than $90 billion has sought the shelter of money-market funds in the past six weeks. That’s roughly the same magnitude of flight response seen in other “risk-off” spasms of the past four years, from the 2011 Euro debt crisis, the “fiscal cliff” drama of 2012 and the “taper tantrum” in 2013.

Professional investors commonly speak of putting certain complicated market calls as on the “too hard” pile. There is wisdom in knowing when one has no clear edge in figuring out a delicate investment situation. But the markets still open just about every weekday, and more often than not they sag into this vacuum.

Through a broad lens, it’s a net positive that the big money has taken cash off the table in favor of waiting. Conservative positioning usually is a buffer against nasty further declines, but comes with no guarantees. Those prior surges in money-market flows proved to be good buying opportunities for stocks and riskier bonds, for what that's worth.

Much of this indecision comes down to a nervous vigil ahead of what remains a toss-up call on whether the Fed will enter liftoff in September, or even December.

Yesterday’s muted reading on consumer inflation gave Janet Yellen little of the ammo she seems to seek...

[SkyPilot]

Does anyone else think that the term "investor" does not apply anymore? Investors used to put their own hard earned money (real money) at risk to start a business that actually produced things and employed people.

Most of these gamblers are not "investors." Central Bank Teat Suckers is a more apt term. When it collapses, we can ask them to take a bow.

[ozzymandus]

It’s all run by insiders who pay off the politicians. There are no legitimate “investors” in charge, just manipulators. Savers have been punished by 0% interest rates for years, and now market investors are seeing their stocks crash. Commodities trading has always been a scam, goldbugs will get stepped on, real estate bubbles will burst, and wealth will be even more concentrated than it is already. And don’t ask me, “So what’s your answer?”, because I don’t have one.

[RightGeek]

Better now than later so the blame can go to the correct resident of the White Hut.

[Farmer Dean]

The Japanese market is down about 375 in the first 25 minutes of trading.Europe took a pretty good beating too.
Is Wall Street in for more trouble tomorrow?

[outofsalt]

I’ve been on the sidelines for a while but I don’t want to catch a falling knife. Next S&P support is 1980 then 1800’s.
Not too sure about either of those levels for reentry though.

[Cry if I Wanna]

The stock market crashed 40% in 2008-2009 but I made a ton of money on the ride back up.

[SkyPilot]

There are no legitimate “investors” in charge, just manipulators. Savers have been punished by 0% interest rates for years, and now market investors are seeing their stocks crash. Commodities trading has always been a scam, goldbugs will get stepped on, real estate bubbles will burst, and wealth will be even more concentrated than it is already. And don’t ask me, “So what’s your answer?”, because I don’t have one.

I agree.

The term "investor" sounds so.....noble. There is nothing noble about the fraud that has been going on for years.

The sky high stock market is such a fraud, but most are too fearful and cowed to admit the truth.

Meanwhile, the nation has been in an actual Depression for years.

And you're right - when you spill the beans around here, some folks demand your "answer." Like we can wave a magic wand and make the Trillions in phoney money and paper mache stock valuation just heal itself.

The elephant in the room is that the current markets have no Price Discovery, and have not had any for years. This is because of Fed manipulation. Without price discovery, you have no free market.

One could argue (and this is where it gets weird) that the US no longer even has a functioning, real economy anymore.

Our government is nothing but a debt zombie feeding 100 Million plus who are not in the workforce, and paying out Trillions.

I wonder how historic and bad the next crash is going to be? Food riots? Martial Law? Rationing? Camps? Federal seizure of private property? Gold and silver ownership outlawed? Freezing and seizure of IRAs and 401Ks?

The flash mobs will quickly run out of stuff to steal. Then, they will turn to the suburbs.

[ForYourChildren]

SkyPilot, “Meanwhile, the nation has been in an actual Depression for years.”

ozzymandus, “And don’t ask me, “So what’s your answer?”, because I don’t have one.”

I agree with you both...

Todays unemployment rate, if calculated the same way as during the great depression, would be higher each year since 2008 as anytime during the great depression. And our government has been making it much much worse.

Ronald Reagan said the government isn’t the solution to the problem, the government is the problem. I believe that is the issue now.

There would have an easy fix in 2008, and I believe there still could be an easy fix now.

If they were serious about igniting the economy, they would have removed the heinous taxes and regulations from businesses and individuals. Until this abomination of boat anchor taxes and regulations are removed from businesses and people, then the economy will continue be nothing but stagnate.

When you hear monetary policy, or central bank actions, or some such nonsense; remember it is just a smoke screen to continue illegal, tyrannical, unconstitutional, 3rd world dictatorship marxist policies on the people of the United States of America.

Remove the taxes and regulations from business and people, allow the business and people create and innovate regulation and government free, then you will see the economy take off and the people prosper.

[palmer]

Nice post. The other dynamic is the mob voting themselves more govt cheese and unlimited video on demand. Basically a bunch of fat and lazy slobs who will vote for whoever takes us full Zimbabwe.

[RoosterRedux]

Stop spreading your doomsday crap. Or at least declare that your are a conspiracy nut before you spread it.

[Darksheare]

http://www.freerepublic.com/focus/news/3326121/posts?page=47#47

[silverleaf]

Rumor has it that something exceptional has started and tomorrow will be epic

Tune in tomorrow night to see if my source is correct

The bad news is there is widespread shock among financial managers that some major players apparently see and accept a war as necessary to reset the markets ... Call it globalized QE with bombs and bullets

Take your pick where it will happen, shots being fired on multiple fronts tonight

[Cry if I Wanna]

The flash mobs will quickly run out of stuff to steal. Then, they will turn to the suburbs.

They'll meet a terrible fate when they leave the safety of their slums and enter our neighborhoods.

[Farmer Dean]

Are you blind to what’s going on?

[cymbeline]

We all saw how Trump came on the political scene by surprise. The experts missed that one. Next surprise: a big financial crash. Another possible next surprise: for the last few years we haven’t been in a recovery at all, but rather have been in a hidden-by-politicians-and-financiers slide toward the big financial crash.

I have no idea what’s ahead. Trump will explain it all to us.

[RoosterRedux]

Are you an investor? Or just a big mouth.

I am in the market daily in a big way...and I am not worried.

The market is volatile because it is now a world market and the world is a volatile place. Get use to it.

Or even better yet...make money on it.

I do.

Trade or go home.

[RoosterRedux]

The politicians aren't hiding anything from you. Trump is hiding something from them...not you.

Sheesh...all these nuts expounding on the market.

Our economy is just beginning to get up off the floor and so is the stock market.

When you are already on the floor, how far can you fall.

[Farmer Dean]

Well,carry on then big guy.But I’ve had enough of your rude mouth.

[Cry if I Wanna]

Or even better yet...make money on it.

Yay!! I do. Made a whole lot on the runup after the 2008-2009 crash. Downturns are an opportunity if you open your eyes and don't panic. It's called Capitalism.

[RoosterRedux]

I most certainly didn't mean to insult you or be rude.

It's just your comments are frightening a lot of folks and you don't seem to know a lot about the markets.

The world is a volatile place and the markets are now world markets.

Scaring investors is not a good thing but an irrational thing.

If you are not a market expert (and who is)...please stop acting like you are.