"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Wednesday, September 15, 2010

$10 billion withdrawn from U.S. Equity Market and Market spikes to the close courtesy of the Federal Reserve Bank of NY

$10 billion withdrawn from the U.S. Equity Market in two weeks
and the equity market celebrates with a spike to the close
on anemic trading volume once again.

Washington, DC, September 15, 2010 - Total estimated inflows to long-term mutual funds were $5.24 billion for the week ended Wednesday, September 8, the Investment Company Institute reported today. Flow estimates are derived from data collected covering more than 95 percent of industry assets and are adjusted to represent industry totals.

Equity funds had estimated outflows of $1.06 billion for the week, compared to estimated outflows of $9.65 billion in the previous week. Domestic equity funds had estimated outflows of $2.24 billion, while estimated inflows to foreign equity funds were $1.17 billion.

Total Domestic Equity Flows/Week Ending
-$2.235 Billion 9/8/10
-$7.707 billion 9/1/10
-$4.311 billion 8/25/10
-$2.712 billion 8/18/10
-$2.077 Billion 8/11/10
-$2.122 Billion 8/4/10
-$11.120 Billion for the month of July 2010
-$7.519 Billion for the month of June 2010
-$19.066 Billion for the month of May 2010

Since April 30th, 2010, $58.869 BILLION has been withdrawn from Domestic Equity Funds (This is the 19th sequential weekly outflow from US stocks).

Zero Hedge Commentary...as only Zero Hedge Does!
The kicker: the S&P is at the level it was when the outflows began back during the flash crash. If that doesn't restore all your confidence that Uncle Sam will be so good at managing the market (just like he has done with everything else), nothing else will.

Throw in a little HFT, a little subpennying, a little Flash trading, a little DMA (Direct Market Access) trading, a little quote stuffing, a little hedge fund clubbing, a little specialist front running, a little daily flash crash in big caps like Nucor Steel, and you can see why next week we will most certainly have our first inflow in 20 weeks. Or not.

It doesn't matter. Nobody that is made of carbon, or who doesn't already have direct access to the Fed for zero cost funding, is trading stocks anymore.

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