Smart Money Monday – All Out Or More to Go?

This has been the flow of Bloomberg's "Smart Money Flow Indicator" and, as Zero Hedge wonders:  Just who is soaking up what the smart money is selling?  Company Buybacks, Johnny 5 (tradebots) or the Greater-Fool Retail Investors?

What is clear is the institutional investors, the so-called "smart money" are dumping shares like there's a crash – only there isn't any apparent crash – the indexes are pretty much holding on fine, making their losses back on low-volume days while steadily selling off on higher-volume days, which needs to a massive net outflow of "smart money" replaced by a steady supply of "dumb money". 

Of course, there's no money dumber than the Fed, who buy and buy and buy and buy and then, when it's hard to remember a time when they weren't buying – they buy some more.  

Rather than show you the Fed's $4Tn balance sheet again – let's take a look at where the money went.  Oh, there it is – right in the banks!   The Fed has essentially borrowed money, on your behalf, and GIVEN it to their member banks at 0.25% interest (ie. FREE) who CLEARLY are not lending it out.  

And why should they?  They can simply turn around and buy TBills by leveraging their cash 10x (banks can do that) and collect 3% for 10 years X 10 = 30% while the Fed charges them 0.25% for a 29.75% annual profit on every dollar.  Why then, should they lend it to you?  Why should they offer you interest on your deposits when the Fed gives them all the money they want for free?  
Banks USED to perform an important economic function that would save and protect your hard-earned money and your money was then lent out to other hard-working people so they could buy homes and cars and invest in businesses.  Not any more, now banks only lend to Corporations and people with pristine credit (auto companies have to do their own lending), although they do let you buy things with Credit Cards that charge 12% interest plus another quarter-point to the retailer, of course.  

As you can see from the chart on the left (from Q1 last year), taxpayer subsidies account for essentially ALL of the Big Banks' profits.  They simply wouldn't exist without us and we have it drummed into us that they are "too big to fail" so we support a system that continues to hand them tens of Billion of Dollars per month to keep them alive while, at the same time, cutting Government programs that help actual human beings survive – MADNESS!!! 

IN PROGRESS