Discussion in 'Trading' started by dividend, Aug 21, 2007.
Anyone care to explain what just happened in the t bills market...
there's a bloomberg article that explains it.
basically, money market fund managers are scrambling for risk free $$$. they don't want commercial paper.
yeah but they sure as hell still want the riskiest investment out there stocks. the stock market isn't down shit and is still actually up 6% this year. it should be 10k max based on the panics going on
The average investor doesn't understand what is going on and isn't repositioning. Thursday would have pushed them over the edge though.
So far, the powers that be are doing a GREAT job of keeping everyone confused.
PS - Long only MF managers are only a notch or two above average investor status...if that.
yea but this is the genius of the current bull market. How the hell can it crash if there's not much (or very little) dumb money chasing stuff up.
average investor is NOT trading this market.
lot more upside than down with that considered. When we have blowoff top driven by retail, news/fear like this -will- crash it.
Surely there must be lots of folks invested indirectly via 401k and IRA that must be saying time to redem in to something safe ....treasury bills?
I see oil is under $70 this will hit energy stocks tomo, surely it will be a down day?
Yeah, you can be sure that many "money market" funds and other nebulous things are exposed to commercial paper (it isn't just a sub-prime problem anymore). Part of oil's fall is that people are risk averse right now. Cash is king.
The MF investor can reallocate to their MMF/GIC. If MMFs really start blowing up, people will forget about tax penalties and go to real cash as the next step. The average investor is still invested in the market, but this time there is an additional layer of portfolio management to go through before liquidation occurs. Client statements are typically mailed monthly.
I think to get the bull really rolling we should just up the tax on checking/savings account income. That would mobilize the stagnant $ real quick!
PS - Just forming a hypothetical scenario to watch/listen for. I had one complete amateur (relative) call me last week to give me the "I told you so." He had moved his entire 401k to MMF. It would be ironic if he lost money in the MMF not in equities.
blow off top was s&p 1550, whether it was retail driven is immaterial.
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