Economic Charts

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Wednesday, September 29, 2010

Weekly Fund Flows Update

The weekly fund flows report was out this week showing continuing outflows out of Domestic Mutual funds and small/medium flows into foreign stocks.  $1.907 Billion dollars came out of Domestic Mutual funds and $616 Million into Foreign Mutual Funds (shown in Figure 1 below).
Figure 1

Bonds saw large inflows again this week.  A total of $6.913 Billion poured into Bond funds with $6.295 Billion of that number going into taxable bonds and $619 Million flowing into Municipal funds (shown in Figure 2 below).
Figure 2

Figure 3 shows the total Mutual fund flows (Domestic + Foreign) vs. Total Bond flows (Taxable + Municipal).   Again we see a flight from the stock market and into the bond market.
Figure 3

Between the constant flows out of Domestic Funds and POMO actions, you can see how the stock market is being supported by government funds.  How long can this continue?  This is not a healthy trend and is increasing the bill that Americans are going to have to pay later.

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