Philly Fed, HFT, Outflows

Wow! Philly Fed came in at -0.7, missed expectations of 0.5, prior at -7.7. Market sold off for about 30 seconds, and then bounced. That move seems to be perfect evidence that this low volume bs-rally we've had since late August is dominated by algo-traders and hedge funds who are chasing beta with the understanding that the Fed is 100% prepared to throw taxpayer dollars at the market should the top 10% face any haircuts. Market is again almost entirely dismissing bad economic reports and geopolitical events roiling just below the surface. The lack of correlation to reality and recurring flash crash type market irregularities have lead many people to leave the equity markets for the safety of negative real return bonds.

ICI's latest data reports that in the week of September 8th, domestic funds saw outflows of $2.2B, following the prior week's $7.7B. The tally now stands at $65B for the year. Amazing that the indexes could rally almost 7% in September while people rush for the exits. This is the 19th sequential outflow for stocks. I am becoming increasingly concerned that the HFT and quote-stuffing criminals are going to ruin one of the strongest things about the US Economy: Well functioning, liquid equity capital markets that attract both foreign and domestic interest in droves because of the rule of law and assurance of fairness and equality among participants regardless of size or pedigree. The market as we now it is being destroyed. Where are the lawmakers? The HFT lobby must be incredible (oh yeah, and wealthy...)