The Underwear Got Mighty Stained in March and April
Margin debt fell for the first time in 8 months during March, as the speculative rout took its toll. And according to ZH, April will show even more "deleveraging", as hedge funds were monkey hammered during what is usually "the best month of the year" as well.
Don't worry about the economy, there isn't one...
We also just learned that first quarter GDP was actually negative, by as much as -.8%, which in terms of honest GDP (aka. debt adjusted) is -5%. Either way, the U.S. is already in a one quarter recession...
Margin debt fell for the first time in 8 months during March, as the speculative rout took its toll. And according to ZH, April will show even more "deleveraging", as hedge funds were monkey hammered during what is usually "the best month of the year" as well.
Don't worry about the economy, there isn't one...
We also just learned that first quarter GDP was actually negative, by as much as -.8%, which in terms of honest GDP (aka. debt adjusted) is -5%. Either way, the U.S. is already in a one quarter recession...
Extend and Pretend to the End
Meanwhile, just today Fed Chief Janet Yellen told us don't worry about negative GDP because that may have been a one quarter aberration and things are not as bad as they look in reality. However, she did say that housing was tanking again, but possibly not a major cause for concern:
http://www.marketwatch.com/story/yellen-stays-upbeat-but-is-watching-housing-2014-05-07
Don't worry about the tanking housing market (yes, again):
Y2K Deja Vu
Meanwhile, just today Fed Chief Janet Yellen told us don't worry about negative GDP because that may have been a one quarter aberration and things are not as bad as they look in reality. However, she did say that housing was tanking again, but possibly not a major cause for concern:
http://www.marketwatch.com/story/yellen-stays-upbeat-but-is-watching-housing-2014-05-07
Don't worry about the tanking housing market (yes, again):
Y2K Deja Vu
Getting back to stocks, way back in the year 2000/2001 in the teeth of the bear market, stocks would usually stage a rally around mid-day, but by 2:15pm, the margin clerks would enter the market and start dumping shares out of overleveraged accounts all over again. That went on for weeks and months. Just as the increase in margin debt lifts the market on the way up, so too does it put a crushing weight on the market on the way down.
How Can We Add More Risk?
Peak margin debt
Tanking economy
Tanking housing market
Tanking economy
Tanking housing market
IPO Lockup Expirations
Momentum stocks hammered
Momentum stocks hammered
Carry Trades Unwinding
Fed Liquidity Tapering
Rotation into Defensive Stocks
Mass complacency
Total lack of hedging
Mass complacency
Total lack of hedging
And Dow still near all time highs...
Volatility is rising and the HFT Bots are starting to get system tested in real-time. A production system test - not necessarily highly recommended.
Peak Leverage Visualized:
NYSE Margin Debt With S&P 500:
NOTHING MATTERS UNTIL IT COLLAPSES, SO BTFATH
