In a review of the commercial paper and money fund data we saw evidence of a stall in the explosive rate of transfer of assets into money market funds. They lost about $24 billion in the week ended 2/23, over a period where the S&P lost nearly 100 points. There goes the theory that all that cash on the sidelines will boost the market. I’ve had another theory which I have been posting here for the past month or so. The cash is needed to fund everyday expenses and current obligations, specifically BECAUSE THERE IS NO INTEREST INCOME as there normally would be to support these obligations. The zero interest rate policy causes self cannibalistic behavior. We are forced to eat our own wasting assets to survive. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.
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