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Money Flows : IN and OUT

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= OUT ==

 

Stock fund selling pressure eases, but bond funds hit hard

 

By Jonathan Burton

Last update: 5:55 p.m. EDT Oct. 16, 2008

 

SAN FRANCISCO (MarketWatch)-- Mutual-fund investors pulled an estimated $13.9 billion from U.S. and international stock funds in the week through Oct. 15, or only about one-third of the $43.3 billion exodus in the prior week, TrimTabs Investment Research reported Thursday. Still, outflows from U.S. stock funds, global equity funds, and bond funds are on track to set records in October. Funds that invest primarily in U.S. stocks posted an outflow of $7.9 billion, versus an outflow of $27.3 billion a week earlier. Funds that invest primarily in non-U.S. stocks had an outflow of $6.1 billion, compared to an outflow of $16 billion in the prior week. But bond funds came under the greatest pressure as investors withdrew $15.1 billion, or almost twice the $8.8 billion that moved out of these funds in the previous week. Bond funds have experienced the most ferocious selling, TrimTabs said, losing an estimated $35.3 billion (equal to 2.5% of assets) so far this month

 

/see: http://www.marketwatch.com/news/story/stoc...&siteid=rss

== ==

 

But someone bought those shares, so who was that?

 

The money pulled out will eventually come back, unless they give up entirely

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Wouldn't this just be selling into the market at lower prices and also retire funds still purchase as a result of contribtuion allocations.

 

Alternatively, I would expect that the US government needs to support equities by quietly purchasing through secret accounts and go through something like JP Morgan to buy. Afterall JP Morgan seems to be controlled or owns the US government a big favour for the discounted purchases.

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= IN ? ==

 

Banks Are Likely to Hold Tight to Bailout Money

 

By LOUISE STORY and ERIC DASH

Published: October 16, 2008

Even as the government moves to plug holes in the nation’s banks, new gaps keep appearing.

 

Big banks have lost about $1.06 for every dollar earned during prosperous years.

 

As two financial giants, Citigroup and Merrill Lynch, reported fresh multibillion-dollar losses on Thursday, the industry passed a grim milestone: All of the combined profits that major banks earned in recent years have vanished.

 

Since mid-2007, when the credit crisis erupted, the country’s nine largest banks have written down the value of their troubled assets by a combined $323 billion. With a recession looming, the pain is unlikely to end there. The problems that began with home mortgages, analysts say, are migrating to auto, credit card and commercial real estate loans.

 

The deepening red ink underscores a crucial question about the government’s plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves?

 

John A. Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.

 

“We will have the opportunity to redeploy that,” Mr. Thain said of the new capital on a telephone call with analysts. “But at least for the next quarter, it’s just going to be a cushion."

 

Granted, the banks are in a deep hole. For every dollar the banks earned during the industry’s most prosperous years, they have now wiped out $1.06.

 

Even with the capital from the government, analysts say, the banking industry still needs to raise around $275 billion in light of the looming losses.

 

But Treasury Secretary Henry M. Paulson Jr. is urging them to use their new capital soon. On Monday, Mr. Paulson unveiled plans to provide $125 billion to nine banks on terms that were more favorable than they would have received in the marketplace. The government, however, has offered no written requirements about how or when the banks must use the money.

 

/SEE: http://www.nytimes.com/2008/10/17/business...ml?ref=business

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Big banks have lost about $1.06 for every dollar earned during prosperous years.

Granted, the banks are in a deep hole. For every dollar the banks earned during the industry’s most prosperous years, they have now wiped out $1.06.

 

Even with the capital from the government, analysts say, the banking industry still needs to raise around $275 billion in light of the looming losses.

 

 

oh. is that all. perhaps we can start developing,selling houses to each other again. only this time - using our own taxes.

makes perfect sense to me.

 

and what with the govenments new - we will bail out any business in trouble stance, my new line of illuminated unicycle shorts will be secure in the knowledge that if i wipe out £2 mill in development costs, i can simply ask the taxpayer for free backing of the losses.

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ASSETS (sizes approx.) in the USA

 

Housing : $20 Trillion

Stocks.. : $20 Trillion

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But someone bought those shares, so who was that?

 

Aww DrB - I thought you were going to tell us !!!!!!!!!

 

Those outflows are much larger than usual I assume - but they are small beer compared to the drop in values on the stock market.

 

People who were on margin and got stopped out - they wont be able to get in like they were before will they?

 

Is there any news on hedge fund outflows - besides this:

 

http://www.telegraph.co.uk/finance/finance...edge-funds.html

 

Fearful investors withdrew at least $43bn (£24.9bn) from US hedge funds last month as world stock markets tanked as the global financial crisis worsened.

 

Conrad Gann, TrimTabs' chief operating officer, believes that the outflows in September could be merely the beginning of a serious flood of money out of the hedge fund sector as investors become fearful of performance and indeed losses.

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Is there any news on hedge fund outflows - besides this:

 

http://www.telegraph.co.uk/finance/finance...edge-funds.html

 

Fearful investors withdrew at least $43bn (£24.9bn) from US hedge funds last month as world stock markets tanked as the global financial crisis worsened.

 

Conrad Gann, TrimTabs' chief operating officer, believes that the outflows in September could be merely the beginning of a serious flood of money out of the hedge fund sector as investors become fearful of performance and indeed losses.

 

Yep add these to the mix

 

"Citadel confirmed to CNBC that its flagship Kensington and Wellington funds, which hold around $15 billion in assets, are down between 26 percent and 30 percent so far this year.

 

But Chicago-based Citadel denied rumors that it's having difficulty meeting margin calls and is facing mass redemptions. The firm also denied that it's unwinding any positions.

 

Highland, on the other hand, is unwinding positions, according to traders with knowledge of the activity of the big hedge fund company, which has $14 billion under management".

 

http://www.cnbc.com/id/27204824

 

 

 

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Fearful investors withdrew at least $43bn (£24.9bn) from US hedge funds last month as world stock markets tanked as the global financial crisis worsened.

 

Bloomberg now reports that 11% of Hedge Funds were redeemed in Q3.2008

 

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Might the majority of it be parked in US short term treasuries, with gold tanking it will be perceived to be the safest place to be IMHO.

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