Biderman on CNBC Talking Where Investors are Putting Their Money

Oct
24

TrimTabs’ Charles Biderman was on CNBC Thursday discussing where investors are putting their money after breaking down his data. “A huge amount went in [to equities] starting on Thursday when it became apparent that there would be a deal,” Biderman said. “It was actually a whopping $17 billion went into US equity mutual funds and exchange traded funds [ETFs] combined. That’s a huge amount of money.”

To see the entire video, click here.

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4 Responses to Biderman on CNBC Talking Where Investors are Putting Their Money

  1. Chris on October 24, 2013 at 5:11 pm

    Hi Charles – given you are one of the few w/ the cojones to dig into details and state the facts…any chance you can review and discuss the prime tenant of Keynesian thinking…that growth is the elixir to all our problems?

    Or another way to think about it, an increase in economic activity (say a 3.5% jump in GDP from $16 T) would increase economic activity by $560 B but the increase in tax revenue would be @ 20% of that or $110 B…the parallel rising interest rates to say 3.5% would raise interest costs to $600 B…a net deficit increase of $140 B.

    Due to debts larger than the economic engine to pay for them…One step forward economically would create two steps backward budgetarily(hello Reinhart and Rogoff). This would also seem true for State, muni, local, corporations, housing, and any other interest rate sensitive sectors. Now of course the Fed will remit the increase in interest back to the Treasury (+$25 B) but point still seems valid that growth increases the budget deficit?!?

    Glad to be proven right, wrong, or have greater minds than mine ponder this.

    • Chris on October 24, 2013 at 5:19 pm

      or to the point…

      can the economy grow (w/ or w/out more debt) w/out interest rates rising in tandem??? If no, then is the chase for growth is a fools errand?!? If yes, is there a precedent for growth absent rates rising?

      • cbiderman on October 24, 2013 at 7:56 pm

        I believe that without removal of governmental restrictions — including higher taxes — a 3%+ growth rate is not likely. Growth in nominal wages and salaries is down by about 1%, from 3%-4% last year to 2%-3% this year due to higher taxes. Housing was about 20% to 25% of the US economy prior to 2007. Now it as about 10% and housing has little chance of a rebound now that the government has taken over the mortgage market.

        China will implode as the true amount of local government borrowing gets uncovered. If China busts, then without emerging markets and real estate where will above trend growth come from? No place that I can see.

        So, yes if we could grow at high single digits yearly for a decade and didn’t increase our obligations, we could grow our way out of this mess.

        I want to add one point about government being ineffective. Yes, many local governments are relatively cost effective in providing utilities — sewer and water — and infrastructure — roads. When governments try to provide services is when the problems we have now started.

        • Ed_B on October 28, 2013 at 6:45 pm

          Government is one of those things that work their best at the local level. County sheriffs, for example, are closer to the citizens who elect them than are state and national politicians. Because of this, they are more in touch with the voters and tend to reflect the opinions of those voters. This reduces at the state level and virtually disappears at the national level. This is why the US Gov is out of control and hurtling towards the end of the road and the cliff that awaits. The end result is not only clear, it is also unavoidable because there is no will in the US Gov for reducing spending. It is apparent that we will have to go through an economic crash before enough people wake up to the idea that we are on an unsustainable path and anything that is unsustainable… ends… and more often than not, it ends badly.

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Charles BidermanCharles Biderman is the Chairman of TrimTabs Investment Research and Portfolio Manager of the TrimTabs Float Shrink ETF (TTFS)

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