Tuesday, March 23, 2010

Risk Assets vs. Money Market Flows...

I must say the below chart is interesting, but as we all know "correlation does not imply causation"...

So did the fear that caused the sell-off in risk assets ALSO cause the flight to money markets (and the subsequent ease of fear that caused the reversal to occur) OR did the flows from money markets itself cause the rally?

Source: BarCap / ICI

1 comment:

  1. Maybe people want their money out of money market funds because the FED is going to use them for REPOS and they may get stuffed with AAA MBS paper?