The WSJ noted that, according to the Money Fund Report
newsletter, "Investors to money-market funds added $21.26 billion in
the week ended
Tuesday, bringing total net assets to a record $2.333 trillion. The
previous record had stood since Dec. 10, 2002."
About 86% of the money came from Institutional investors — $18.32 billion; individual investors contributed $2.94 billion.
This sort of data is always tough to draw conclusions from: We know there is a record amount of cash in Money Markets, but the tough question is why?
I can think of many reasons — none of which have any quantitative support:
• Hugely profitable, cash rich corporate earnings gotta sit somewhere;
• Skittish investors don’t believe the rally, leaving money "safe;"
• Big bonus pools/high earners cash not put to work yet;
• The ongoing option backdating scandal continues to plague investor confidence;
• There’s always been huge cash on the sidelines, even thru the 1990′s bull market;
iMoneynet, the source of this data, expects to see this cash hoard continue to rise into 2007.
Is this pile of cash significant? That is an interesting question, and one I simply do not know the answer to . . .
$200 BILLION GROWTH IN INSTITUTIONAL MMFs POSSIBLE IN 2007
iMoneynet, December 1, 2006
Money-Fund Assets Hit Record
WSJ, December 14, 2006; Page B8
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.