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Monday, December 5, 2022


Rollerball 1975

Courtesy of RobotTrader

Reminds me of today’s financial markets, where “Inflation” vs. “Deflation” oriented teams roll around in a circle annihalating each other until all the players are dead.  Meanwhile, Lloyd Blankfein sits in the executive box, relishing in the action.

Imagine all the players as hedge fund managers with billions under management, each of them attempting to game the market in order to “make their year”.  Some are long-only inflation macro funds, others employ short-only deflation trades.

Here are a couple of such players, gunning to a home run for the year end statement print:

All are prime brokerage clients of Goldman Sachs.  And sitting in the executive box in the audience is Lloyd Blankfein, who suddenly removes all restrictions and rules and turns the game into a free for all so he can watch his biggest clients annihalate each other:

Nothing new today, other than the 10,000 sound barrier broken, led by various and assorted junker plays.

Office REITs, apparel companies, doughnut plays, all of course on the verge of bankruptcy:

The Cosmic Joke of it all is that Joe Sixpack is still piling his money into bond funds, and outflows from stock mutual funds continues unabated.

Proof that todays stock market is being gamed solely by hedge funds battling Goldman Sach’s Prop Desk.

As reported by today’s Los Angeles Times:

“Most categories of bond funds racked up another round of strong returns in the three months that ended Sept. 30.

“There has been a complete sea change from the fourth quarter of 2008,” said Robert Auwaerter, head of the fixed-income group at mutual fund giant Vanguard.

That increased appetite for risk, coupled with near-zero yields on money market funds and skepticism about how long the stock market’s recent boom will last, has opened the taps on a virtual Niagara of cash flowing into bond mutual funds.

Investors pumped a net $270.5 billion into bond funds in the first nine months of the year, TrimTabs Investment Research estimates. That intake accelerated in recent months as $12 billion was pulled out of U.S. stock funds in August and September.

American, the second-largest fund company by assets after No. 1 Vanguard Group, saw a net $1.8 billion in cash flow out the door in September as investor redemptions exceeded purchases for the sixth month in the last nine, according to data compiled by Morningstar Inc.

Vanguard, Fidelity and particularly Pimco have benefited from record demand for bond funds this year, as many individual investors have opted to play it safer with their money rather than risk another huge loss if the stock market should dive again.”

Today’s casualty from the stresses and travails of the Rollerball Stock Market:

Bruce Wasserstein

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