about that wall of cash on the sidelines…
Courtesy of Joshua M Brown, The Reformed Broker
The piggybank is not just being emptied, it is being pigraped by 250 million Americans who are tired of being penalized for saving.
What’s the latest on that "Wall of Cash" on the sidelines?
Ask USA Today:
Investors are yanking money out of money funds and moving to bond funds — but some are just cashing out. Investors pulled a net $490 billion from money funds this year through October, according to the Investment Company Institute, the funds’ trade group. A record-shattering $313 billion went to bond funds. And $1.9 billion fled stock funds.
"More money is flowing out of money funds than is going into bond funds — something that’s only happened twice in 26 years," says Vincent Deluard, strategist at TrimTabs.com, which tracks fund flows. "It shows how deep the recession is: They may be taking money out to pay the bills or the mortgage."
It’s the shock of the century! Helicopter Ben drops rates to a semi-permanent zero percent and people decide that saving is pointless! Whodathunkit? They then pull cash out of money markets and fling it at anything doing business in China or promising a decent bond yield.
Amazing what Cause and Effect can teach us!
Viva Responsible Monetary Policy! Keep "stimulating", Ben, someone will get a job sooner or later!
Sources:
Investors Cash Out Of Money Funds in Droves (USA Today)
