The Gold Plunge May Have Been The First ETF-Led Death Spiral
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A “Reversal” Sort of Morning
So far everything that went down is up and everything that went up is down. Not surprising given the magnitude of some of the moves and how unexpected they were.
Was yesterday the start of a bigger move down for risk assets, or just a one-day blip as equities attempt to resume their QE-fueled rally?
I think we have more downside ahead of us, but what concerns me more is that the downside may be larger than we realize because of how the market dynamics are playing out.
ETF Flows Matter
For some time now, people have speculated what would happen if “retail” pulls out of “ETFs” and “fixed income ETFs” in particular. That question is too broad and has too much of an agenda.
For many of the big ETFs, assuming that they are “retail” flows is wrong as they are institutional as well.
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