Bloomberg’s Barry Ritholtz examines investor sentiment about the current bull market, comparing it to past runs and whether or not it can continue to climb. He speaks on “Market Makers

Where’s the Love? Investors Shun Bull Market Rally

Bloomberg June 27 2014

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Barry Ritholtz and Alix Steel discuss the new, aggressive approach taken by the U.S. government against banks. They speak on “Market Makers.”

What Prompted a Tougher U.S. Stance on Banks?

Category: Markets, Media, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Where’s the Love? Investors Shun Bull Market Rally”

  1. Low Budget Dave says:

    In 1944, Hayek claimed that banks were self-regulating, implying (in effect) that consumers would refuse to do business with banks that laundered money for terrorists. The 70 years since then have failed to produce a single example. Since the depression ended, bank customers have repeatedly demonstrated they would keep their money in a bank owned by drug dealers if it earned an extra half percent.

    WSJ is already whining that the poor stockholders of BNP will end up paying the fine. Boo-hoo. If they don’t want to pay fines, then they need to hire better management. Banks no longer lose their licence for bad behavior, nor do bankers even miss their anual bonus payments. The only tool left is to levy fines large enough to prod the shareholders into action.

    The WSJ theory, as far as I can tell, is that bank officers should never be prosecuted, because they are just doing what shareholders want, and shareholders should be held harmless, because they didn’t actually authorize the crimes. In effect, banks should be trusted to stop breaking banking rules for no other reason than to make their customers feel better.

    Considering the disdain of average BNP customer for Americans and American banking rules, it will be a very cold day in the Cayman Islands before their customers are happy about following the rules.

    After 70 years and thousands of failures, the WSJ still believes ‘The Road to Serfdom’ is the definitive guide to bank regulations.

    • Iamthe50percent says:

      I agree with everything you say, except about the shareholders. Modern CEO’s have a hammerlock on control and the shareholders are ineffective. Changes require a majority of eligible shares and not a majority of shares voting. Even more, if 90%+ of shareholders want a policy to change and the houses holding huge blocks in street name or by mutual funds don’t, the majority of shareholders will lose.
      AT&T recently had a company proposal to require a supermajority to oust a director. I voted against it, but didn’t even check the results. I’m sure management won. We don’t even get a vote on whether our money should be thrown away on buying DirectTV.

  2. Concerned Neighbour says:

    First, gotta say Barry, nice tie.

    Second, I don’t know anyone who thought stocks were overvalued at the 2009 trough. I know I was certainly buying.

    Third, the reason this is the most hated rally ever is because the price discovery mechanism has been so thoroughly destroyed. You can’t expect people to love a rally when it’s being driven by one controlling hand with a historical and seemingly present total disregard/lack of recognition of traditional fundamentals.

  3. AndrewShaw says:

    Don’t the owners of equities at today’s prices represent the real investors? Investors are not shunning the rally, they own it at these levels and are apparently still buying.

    Those still in cash are not investors. I don’t know the stats of who is still not participating, but after this long and big of a run, they are hardly “investors” any more.

  4. MinskyMinded says:

    Agree with Concerned Neighbour, how can there be any price discovery when the fundamental mechanism, interest rates, is being manipulated. The high corporate earnings supporting valuations are also a direct reflection of government deficit spending as GMO has pointed out many times.

    We’re supposed to be “data driven” investors, but who has the data set for the uncharted waters we’re in? Are we supposed to love this rally based on a chart breakout, and unsustainable government actions?

    Hard to get on the secular bull band wagon when the market can’t stand on its own two feet and throws a tantrum every time there is a hint the free money will be taken away.
    Everyone is free to speculate on how long unstainable government actions can go on, but that is not data driven investing – we have no data for a QE/ZIRP/Deficit Addicted world.

    As Grantham has said, you can speculate how much further this rally may go, but you won’t have any excuses if it ends badly.