Friday, March 19, 2010

ALERT: Huge Money Market Outflows

Last week, money market funds recorded a HUGE $60 billion outflow. This was 2.2% of all money market assets! The week before it was a $30 billion outflow. Both of these are the two largest outflows since the collapse of Lehman. That week it was a $144 billion outflow.

The current outflow is seismic. It is not clear what is causing it, possibly a sudden shift by investors seeking higher yield. Whatever it is, it is likely not good. This size change in flows can easily be classified as a turn of the kaleidoscope which I discussed earlier this week. This means a serious shift, again, in trends. Just how and where, time will tell, but a $90 billion outflow is going to rattle something.

1 comment:

  1. Reg 2a-7 takes effect May 5 and will allow redemption suspensions and force AWM < 60 days from 90.