Economic Charts

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Wednesday, November 24, 2010

Weekly Fund Flows Munis In Trouble?

This week in the weekly fund flows some interesting things occurred.  For the week ended November 17th 2010 the amount of money coming out of domestic stocks shot back up to $2.797 billion dollars and $1.633 billion flowed into foreign stocks.  The interesting action though is what occurred in bonds.  Money flowing into Taxable Bonds slowed to $457 million dollars, down from a 4 week moving average of $4.457 billion dollars.  The other very interesting event that occurred is a massive move from Municipal bonds, in which $4.781 billion left muni's down massively from the positive inflow of $366 million 4 week moving average.
Looking at the Bond money flows, it really prompts you to wonder why the massive outflow from municipal bonds?  Are Muni bond holders indicating that their is a problem with states and their bonds?  Only time will tell, as I have said before it will take more than one week of action to determine a new trend, but this was an outlier in the muni market and definitely gets your attention.

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