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You Are A Silly Bunch With Your Fingers On $610 Billion

You people are an irrational bunch and you always have been.

You people are an irrational bunch and you always have been.

You do silly things, like bid up tech stocks to infinity because you think your new and improved crystal ball works better than the one that failed you so miserably in 2000.

You chase high yield credit when prices have become completely detached from fundamentals.

You sell vol. using doomsday ETPs you don’t fully understand.

You imagine that ETFs can somehow be more liquid than the underlying.

You convince yourself that because bonds are expensive, stocks are “cheap” as though you do not understand the meaning of the word “relative” (“I bought an S600 because it was ‘cheap’ compared to a Phantom”).

You convince yourself that while $14 trillion in central bank liquidity drives risk assets to nosebleed levels, somehow the slowing or cessation of that flow won’t have the opposite effect.

And you buy avocados for $2 each.

Again, you are a gang of irrational silly people who are in the habit of getting yourselves into trouble every now and again and then acting like you don’t know how you got there when it all falls apart.

So given that you and everyone who looks like you is silly, it doesn’t surprise me to learn that when BofAML asked you if you were taking higher than normal levels of risk with markets stretched to historical extremes, so many of you answered yes that it looks like BofAML might have had to slightly adjust the damn y-axis on this chart:


And that’s hardly the end of this story. The other thing BofAML found out when they talked to you was that the net percentage of you who think equities are overvalued is at a record high, and yet your cash levels are falling:


Clearly you know you and your friends might have a problem, because according to the same global fund manager survey, you overwhelming believe that “long Nasdaq”, “short vol.” and long HY and EM bonds are crowded trades:


Further, you obviously recognize the risk that central banks could make a policy mistake (presumably tightening too fast and triggering an unwind in one of those three most crowded trades) or that VIX ETPs and robots could become self-aware one night and murder us all in our sleep. I know you recognize that because you said you did:


And yet you’re still invested, aren’t you? In fact, you’re probably still in some of the very same trades you clearly know are crowded.

But it’s fine, because it’s not like this survey represents a large cross section of market participants who are managing a lot of money. BofAML “only” surveyed 206 panelists who “only” manage a combined $610 billion in AUM.




9 comments on “You Are A Silly Bunch With Your Fingers On $610 Billion

  1. Tom Swift Jr.

    Ok, now you’re starting to sound like Slats Grobnik.

  2. Retail will get caught in the downgrade

  3. “And you buy avocados for $2 each.”

    Hey! I resemble that remark!

  4. H-Great post and a LOT of people are in for some nightmares in the future. Let’s see there was a straw here somewhere and where is that damn camel.

  5. Give us hell H!

  6. When there is a sufficient portion of “stupid” in a nations population large enough to elect a fucking real estate developer (currently selling of the nations’ national park lands – who would have guessed?)/second generation KKK sympathizer/”reality TV” host/multi-decadal misogynist/and Russian and general fascist sympathizer – to elect this as the nations’ President – things in general are so catastrophically worse than what this article understates – or any article can describe – it’s beyond absurd.

    • Dugger, just to add as of this morning’s news that he has now approved killing elephants for trophies such as tusks — most likely because Jr asked him to so he could add to his collection of dead animals and the elephant tail he got when he killed his last elephant!!

      • The only good news is some mighty hunter might mistake the UGE Donald as an elephant. I can see him mounted in some billionaire’s trophy room (are there any progressive billionaire white hunters?). Now that is something I would pay $70 to see even if it was in a national park – or what will be left of them after Trump’s finishes selling them off to his real estate developer, oil and coal buds.

        • I find it really hard to believe that a President has the power to sell America’s land and erase controls of water/air pollution, etc. How is that possible? Maybe because no one IN THEIR RIGHT MIND would ever do such a thing or even imagine that a President would do that! One step more, how is possible that scum in political offices would not step up and stop such betrayals?

          When this one is out of office SOON some amendments must be made to prevent something like this from every happening again…..assuming the world has not been vaporized by then.

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