By: Larry MacDonald
A lot of people pushed the panic button in September. TrimTabs reported $75 billion fled U.S. mutual funds during the month, three times the monthly record set in 2001 for redemptions! About two-thirds of the outflow came from equity funds and the rest from bond funds.
When we had Claymore Investments CEO Som Seif as a guest at our last bloggers’ meeting, he said heavy fund outflows were an important indicator of a bottom in a bearish stock market, going by the historical evidence. It was at the top of his things to watch.
September might not be the exact bottom, but the figures would seem to at least indicate it’s getting close. “I agree,” says Mr. Som in response. “However so much will depend on Congress at this point,” he added.
7 Responses to “ Panic button time ”
Larry, $75bill is scarry to say the least. The market appears to be drained. Drained of cash, drained of confidence, drained of understanding of financial stocks. And now with the new sec guidance, allowing management to subjectively apply value to various assets on their sheets. We are drained of our fundamentals. What are we to do?
I haven’t heard many bloggers discussing the impact of the new Sec guidance, however I do think it is very important and can have as big of on impact as the bailout. Imagine if all the banks subjectively valued their assets? Where is the standardization? Source
By OilyGasMiner on Oct 1, 2008
Oily
I did hear talk mark-to-market was under review. So is it now out of the discussion phase and being implemented? If not, likely will be — part and parcel of the process of bailing out the market with rule changes (short-selling ban, fewer restrictions on company buybacks, private equity firms allowed greater stakes in financial firms, etc.).
By Larry MacDonald on Oct 1, 2008
Any thoughts on the fertilizer stocks?
By sliman on Oct 2, 2008
In actual fact very good site…successes are in advancement
By Hiciptiorsese on Nov 5, 2008