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September data reveals increased risk appetite among ETF investors
Tracking flows in and out of major exchange-traded funds (ETF) can reveal investors’ risk appetite. The 23 largest ETF’s by assets under management represent approximately 50% of all US ETF assets. In September, the largest inflows in percent of assets were registered by domestic equity (SPY), gold mining stocks (GDX) and high yield bonds (HYG):…
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European car engine stuttering
According to data released by ACEA (European Automobile Manufacturers’ Association) new passenger car registrations fell 8.9% in August after a decline of 7.8% in July. European car markets are quite diverse; it makes more sense to look at them individually: The PIIGS are firmly in control of the bottom (what’s up with those Nordics, Sweden…
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“Who moved my recession?”
Lakshman Achutan, ECRI (Economic Cycle Research Institute) made a recession call for the US on September 30, 2011 (and confirmed it multiple times since then). Gary Shilling, titling his August letter “Global Recession”, says “We are already in a global recession.” However, equity markets don’t think so, with the S&P 500 trading less than 10%…
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Analyze this: The Fed is not printing enough money!
Before you trash me in the comments, hear me out. It started off with Ray Dalio’s “beautiful deleveraging”, which inspired this post. Since the financial crisis, the Fed has increased its balance sheet from $900 billion to $2.9 trillion (red line in below chart). The difference is $2 trillion (or 13% of GDP). When the…
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The “beautiful” deleveraging
Some of my clients like to challenge my (admittedly gloomy) views, forcing me to think – which isn’t such a bad thing to do. It started off with Cam Hui’s “A Dalio explanation of Evans-Pritchard’s dilemma“. After laying down his strategy on winning the game of Monopoly, Dalio goes on to model the economy onto…
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You got Bernanked: Three years gone in three weeks
US Bond market: Over the last three weeks, 10-year US government bond yields increased from 1.4% to 1.81% (green line below) while 30-year went up from 2.46% to 2.93% (red line in second chart): To put things into perspective: Here are those movements on a longer time scale (together with 5-year yields, blue, and the…
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Volatility ETFs’ crazy churn
Two volatility ETFs (VXX and UVXY) are having almost half of the trading volume in the world’s largest ETF (SPY). How come? First, the facts: SPY is heavily traded (19% of assets daily turnover) compared to IVV (also referring to the S&P 500). But then come the volatility ETFs. Tiny VIXY (assets $145m) turns itself…
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Who wants to own Investment Banks?
I went through the latest available 10-Q filings of major US investment banks. I was after the break-down of assets in levels 1-3. As a reminder: Level 1: stuff that has a market price. Level 2: stuff that doesn’t have a market price, but is valued based on similar assets. Level 3: stuff that where…
Author: Alexander Gloy
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