Diary of a Financier

Top Newsstuffs (March 17-23)

In Bookshelf on Sun 23 Mar 2014 at 05:42

Happy Birthday to us!

Asset allocation survey: Retail investors slowly returning to equities (February 2014) | American Association of Individual Investors (AAII)
– Stock allocations +1.3pp to 66.9%; above 60% LT avg for 11 consecutive months (longest streak post-crisis), but below prior cyclical bulls’ ranges (e.g. 1994-2000 & 2004-08)
Bonds -0.8pp to 16.2%; above 16% avg for the last 55 of 57 months
Cash -0.5pp to 16.9%, below 24% avg for 27 consecutive months
[Indicator is most useful at extremes, but at these levels with historical context, there’s little to read into yet–especially considering the threat unto fixed income from a QE taper/ZIRP unwind.]
#Neutral

Investor sentiment survey: Exuberance moderated to normalized levels (March 19, 2014) | American Association of Individual Investors (AAII)
Surveys sentiment for equity performance over next 6 months (through 8/2014):
– Bulls +4.6pp @ 36.8% vs 39.0 historical avg & 60.6 high in January (45% considered extremely high)
– Bears -0.7pp @ 26.1 vs 30.5 historical avg & 18.5 postcrisis low in January (25% extremely low)
– Bull/Bear ratio @ 1.4x vs 4x alltime record in January
#Bullish #Contrarian

Europe strikes deal to complete banking union | Reuters
Agreeing to a [much] modified version of the European Commission’s original proposal, the European Parliament finally approved a weak-form banking union for EU banks, including:
1. ECB authority–  central bank gains power to shut & unwind failing Eurozone banks
2. Resolution fund– €55B back-up fund will be made available to ECB by 2022 for leveraging & spending on clean-ups, although countries will not jointly share in further common, cross-boarder efforts to cover losses from bank failures
This was the “second pillar” en route to a robust banking union; the first will be implemented at YE14, when the ECB will become sole regulator of the financial system; the third (i.e. supranational deposit insurance) seems to have stalled.
[This does nothing to even as much as paper-over the holes in the half-baked EMU/ERM III.]
#Cognitive Dissonance #Bankruptcy #Insolvency $FEZ $EUR

Rail traffic weekly: Pent-up demand arrives! | Association of American Railroads (AAR)
Weekly traffic +7% y/y; growth +0.6pp @ +1.1% ytd.
7 of 10 carload groups posted gains: grain +21%, farm/food +8.8, forestry +3.8, petroleum +2.9; motor vehicles/parts -8.0, metallic ores -3.2.
[Massive pent-up demand surges for the first time after tough winter weather in January/February; petroleum’s picture is developing as law-of-large-numbers now seems to have caught-up with hydrocarbon shipments, but another bullish takeaway is that railtraffic surged this week without the multiyear tailwind enjoyed from US’s crude oil & gas renaissance.]
#Bullish! $DBA $XLE $USO $UNG $XME

77 facts that sound like huge lies but are actually completely true | Buzzfeed
Favorites:
12. The toy Barbie’s full name is Barbara Millicent Roberts… and Cookie Monster’s real name is Sid
25. The unicorn is the national animal of Scotland
61. It rains diamonds on Saturn and Jupiter
64. If a piece of paper were folded 42 times, it would reach to the moon
#Pop culture #Enough useless knowledge to power a locomotive

Picture of the week:

The New Cycle of Psychology | Hofstra University

The New Cycle of Psychology | Hofstra University

–Romeo

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  1. […] Retail equity allocations @ 66.9% are above their long term average of 60%, but not quite up to prior extremes of 70% in 2006 or 77% in 2000. […]

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