$3.6T in Money Market, where will it go?


By Clara   Follow   Mon, 7 Sep 2009, 12:58pm   2,335 views   26 comments
Watch (0)   Share   Quote   Permalink   Like   Dislike  

$3.6T in Money Market, where will it go?

1. Housing Market?

-OR-

2. Stock Market?

Discuss. Personally, I think it will go to Stock Market. :-)

Viewing Comments 1-26 of 26     Last »     See most liked comments

  1. mjfhorsey


    Follow
    Befriend
    15 comments

    1   5:55pm Mon 7 Sep 2009   Share   Quote   Permalink   Like   Dislike (1)  

    I think it stays in the stock market until stocks or housing move up enough for people to feel comfortable jumping in. Smart (unemotional) money went in already (stocks or housing). Unfortunately we still have the emotional buy high, sell low (greed/fear) element in play that will never change.

  2. Malcolm


    Follow
    Befriend
    2,842 comments
    Carlsbad, CA
    Malcolm's website

    2   6:37pm Mon 7 Sep 2009   Share   Quote   Permalink   Like (1)   Dislike  

    Tough choice when only given two options to a pretty dynamic economy. As the economy improves, I would theorize that profits will travel back through the stock market helping individual investors. Real esate, both commercial and residential will see more activity but prices for both will stay flat until the moderate inflation brought about from the extra money supply and low interest rates catches up. Overall, residential real estate is still slightly overpriced but affordable with these crazy low rates. This will resemble a normal market as the price/payment are in line with affordability but interest rates can't really go much lower so prices will have to give some more in California if interest rates are to rise.

  3. HeadSet


    Follow
    Befriend
    4 threads
    1,487 comments
    Hampton, VA

    3   8:54am Tue 8 Sep 2009   Share   Quote   Permalink   Like   Dislike (1)  

    Welcome back , Malcolm!

  4. The Little Guy Lobby


    Follow
    Befriend
    2 threads
    37 comments
    Gotham, WI

    4   7:36pm Tue 8 Sep 2009   Share   Quote   Permalink   Like   Dislike (1)  

    The recovery is on the way. Green shoots! I see green shoots- in about 2025!

  5. nostromo426


    Follow
    Befriend
    1 comments

    5   7:44pm Tue 8 Sep 2009   Share   Quote   Permalink   Like (1)   Dislike  

    Some day all citizens of the world will realize that wealth = MANUFACTURING
    The countries that do have green shoots
    The counties that don't have land that will be bought by China

  6. justme


    Follow
    Befriend (2)
    35 threads
    3,853 comments

    6   8:29pm Tue 8 Sep 2009   Share   Quote   Permalink   Like   Dislike (1)  

    What fraction of the $3.6T in money market accounts is really available for investing in housing, stocks or otherwise?

    Much of the money is day-to-day operating cash parked there by corporations and individuals. Some of the money is already borrowed money (and perhaps borrowed several times over).

    I think it is doubtful that ALL of this cash is waiting for an investment.

    You may also all recall that 3.6T is almost exactly the balance of MM funds last year today, one week before the Lehman bankruptcy caused a massive run on the MM funds. At that time, one year ago, was the balance also waiting for investment? Something to ponder ...

  7. Thordeer


    Follow
    Befriend
    1 threads
    4 comments

    7   9:11pm Tue 8 Sep 2009   Share   Quote   Permalink   Like   Dislike  

    This is an economist's nightmare. Fed has doubled the money out there in less than a year. Depending on your theory of how money moves through the economy, this could have the effect of nothing (if there's slack and low velocity) all the way to doubling the price level. Double. That's no joke.

    To avoid Depression II, Fed and Govt have thrown so much money out there it's unbelievable. It'll be a trick worthy of Man on Wire to see them deflate the bubble without getting too hot or too cold.

    Time will tell. But that's where the money came from, and to balance out prices of goods, assets, and cash, the price level would double.

  8. Clara


    Follow
    Befriend (10)
    11 threads
    169 comments
    San Bruno, CA

    8   10:49pm Tue 8 Sep 2009   Share   Quote   Permalink   Like   Dislike  

    I agree with you, Thordeer.

    Another reason I don't keep money $$$ in cash because I know it's getting ripped off by the government & Fed because they are printing so much paper money. It's crazy to hold the $1 bill when you know it's really mean $.50 cents in reality. I'm putting mine in gold, U.S. stocks & foreign stocks.

    It's crazy to leave money in money market or CD, the government is stealing from you via Inflation.
    IT'S SIMPLY CRAZY TO PUT MONEY IN THE MONEY MARKET OR CD ACCOUNT BECAUSE THEY GOVT & FED IS STEALING YOUR HARD EARNED MONEY BEHIND YOUR BACK VIA TAX, BAILOUT PLAN AND INFLATION.

    Who are they bailing out? You, me????

    No, they are bailing out the executives from big companies and irresponsible borrowers.

    Wake up people!

  9. zzyzzx


    Follow
    Befriend (10)
    767 threads
    6,589 comments
    Baltimore, MD

    9   9:07am Wed 9 Sep 2009   Share   Quote   Permalink   Like   Dislike (1)  

    Stocks.

  10. Clara


    Follow
    Befriend (10)
    11 threads
    169 comments
    San Bruno, CA

    10   7:00pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    Looking back the past 2 years. Stock market win. Luckily, I was right and my money stayed there during that time. :)

  11. FortWayne


    Follow
    Befriend (12)
    154 threads
    5,271 comments

    11   8:07pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    Money is never sitting idle. WSJ writer is wording it incorrectly. thunderlips11 says

    Wall Street Journal August 28, 1930:


    There’s a large amount of money on the sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly entrenched.” Economists point out that banks and insurance companies “never before had so much money lying idle.”


    http://newsfrom1930.blogspot.com/


    Only 9 more years to go...

  12. FortWayne


    Follow
    Befriend (12)
    154 threads
    5,271 comments

    12   8:10pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike (1)  

    I personally pumped some into business. And put some into stocks to diversify some. Re isn't investment, all money is made on initial sale.

  13. B.A.C.A.H.


    Follow
    Befriend (6)
    8 threads
    2,720 comments

    13   9:02pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    EMan says

    isn't investment, all money is made on initial sale.

    Eman,

    Iwog, E-man and SF Ace have been boasting on here for a long time about the Gravvy Train their R.E. investments are.

    Also, I have a colleague, who is a lot more discrete, is using part of the R.E. positive cash flow to put kids through elite private K-12 whilst residing below the radar in a neighborhood that our Fortress Resident colleagues would be ashamed to be seen in. You'd never know s/he is doing so well unless you knew. So I think it can be done. It's just not for all of us.

  14. Hysteresis


    Follow
    Befriend (2)
    14 threads
    660 comments

    14   9:55pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    Sybrib says

    EMan says

    isn't investment, all money is made on initial sale.

    Eman,

    Iwog, E-man and SF Ace have been boasting on here for a long time about the Gravvy Train their R.E. investments are.

    none of them sound particularly successful. they seem like amateurs, and haven't gone through an entire business cycle, yet have a lot to say. beginners are the people i trust the least.

    the grizzled veterans are a lot less enthusiastic, and often stoic because they've been bitten once.

  15. iwog


    Follow
    Befriend (47)
    364 threads
    19,097 comments
    47 male
    Lafayette, CA
    Premium

    15   11:28pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike   Protected  

    I think the real estate doldrums will start to shake out in the next year or two. Rents are moving higher and ultimately that means more support for the people holding this cash to turn it into income.

    The last real estate bull was about 1996 to 2006 so 2012 to 2022 sounds about right.

    Damn I'm getting old.

    I was heavily in stocks in 2009 and 2010, however I've gone about 50% cash recently and am very nervous about the job market and Republican policies. The budget cuts being talked about WILL result in a depression. You don't simply pull trillions out of our GDP without serious consequences, no matter where you fall on the political scale.

  16. ¥


    Follow
    Befriend
    35 threads
    5,700 comments
    Bellingham, WA

    16   11:42pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    Thordeer says

    This is an economist's nightmare. Fed has doubled the money out there in less than a year. Depending on your theory of how money moves through the economy

    Why do you need theories on money in an economy? Take a look at U-6.

    http://research.stlouisfed.org/fred2/series/U6RATE

    No job or wage growth, no overall inflation. This isn't rocket science.

    This is not to say we won't get pockets of inflation -- oil, food, healthcare.

    Oil is driven by extrinsic supply/demand and we are steadily (if slowly) losing our center place at the oil table to China.

    Food . . . if & when the dollar weakens more food will be exported for the same dollar input. This is inflationary to us, since we will have less domestic food supply, and our weaker dollar will buy less food to import.

    Healthcare, well, let's just say this sector's got us by the balls and ain't letting go.

  17. ¥


    Follow
    Befriend
    35 threads
    5,700 comments
    Bellingham, WA

    17   11:47pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    nostromo426 says

    Some day all citizens of the world will realize that wealth = MANUFACTURING

    wealth is a sloppy term that can mean many things.

    At its purest it is the state of being well.

    The next step is goods that satisfy wants and needs, stuff that makes us "well".

    Then it is is the capital skills and goods that assist in this production of wealth.

    Then it is the money and financial instruments that we exchange for wealth.

    At any rate, manufacturing is in fact a core wealth-creating activity. But if Chinese are willing to work for peanuts, theory says we should let them.

    But modern theory is kinda silent on what to do in the face of massive trade deficits. Mercantilist theory says we're getting screwed.

  18. ¥


    Follow
    Befriend
    35 threads
    5,700 comments
    Bellingham, WA

    18   11:51pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    The last real estate bull was about 1996 to 2006 so 2012 to 2022 sounds about right.

    aha aha ha aha haha. Christ what a facile and wish-fullfillment analysis.

    http://research.stlouisfed.org/fred2/series/CMDEBT

    2011 is not 1995. 1935 more like.

  19. Clara


    Follow
    Befriend (10)
    11 threads
    169 comments
    San Bruno, CA

    19   11:56pm Sat 9 Jul 2011   Share   Quote   Permalink   Like   Dislike (2)  

    I recently also cash out 50% of my stock holding. National debt is causing me some concern on inflation and stability short term. I am moving my money away into other asset classes. We'll see. Rent and positive cash flow is doing well, making me 13-14% ROI for me. I am half stock half RE now. Wll closely monitor the oil/gold and stock movement. I don't predict a crash in the near future, but a mild correction is in the making.

    iwog says

    I think the real estate doldrums will start to shake out in the next year or two. Rents are moving higher and ultimately that means more support for the people holding this cash to turn it into income.

    The last real estate bull was about 1996 to 2006 so 2012 to 2022 sounds about right.

    Damn I'm getting old.

    I was heavily in stocks in 2009 and 2010, however I've gone about 50% cash recently and am very nervous about the job market and Republican policies. The budget cuts being talked about WILL result in a depression. You don't simply pull trillions out of our GDP without serious consequences, no matter where you fall on the political scale.

  20. clambo


    Follow
    Befriend (5)
    1,484 comments
    Santa Cruz, CA

    20   1:44am Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    People keep reading how there is a huge shadow inventory of houses that will be foreclosed, which will drive down prices.
    People remember how realtors and other pimps lied to them and tricked them.
    People remember seeing how much money their friends lost on real estate.
    As interest rates inevitably rise, houses prices will fall some more.
    But, you never know what people will do with their money, people are fickle, this is shown over and over.
    Logically, people would buy stocks since the stock represents a piece of profit of a business. Owning Apple, Exxon, Verizon, etc. stock means you have a claim of a portion of their profits.
    Owning a house means you have paid off the mortgage. Until you own it, you are renting the money to keep the house in your name. Stop paying the interest on that money for a short time and it's all taken away.
    Stocks rock for the long run. But, hot women don't like rubbing themselves all over my Vanguard statements, they like sitting in houses, cars, and restaurants, paid for by us.

  21. iwog


    Follow
    Befriend (47)
    364 threads
    19,097 comments
    47 male
    Lafayette, CA
    Premium

    21   2:13am Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike   Protected  

    Troy says

    aha aha ha aha haha. Christ what a facile and wish-fullfillment analysis.

    It wasn't an analysis, it was just an educated guess. I know more people waiting for the right time to buy than I know people on the ropes. You're going to be amazed at how much money is available when the next big thing hits and people start spending again.

    Troy says

    No job or wage growth, no overall inflation. This isn't rocket science.

    Yet we keep getting overall inflation. How come? It's been over three years now.

  22. FortWayne


    Follow
    Befriend (12)
    154 threads
    5,271 comments

    22   8:38am Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    Iwig aren't you the one here who constantly preaches living beyond the means by burdening our children with more debt. I wonder if you even care.

  23. FortWayne


    Follow
    Befriend (12)
    154 threads
    5,271 comments

    23   8:49am Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    I doubt that they are completely honest or understood. Repo4sale claims to be a millionaire yet makes dumb posts about shady stuff he read somewhere on the net. Sface doesn't boast, he talks just about how its a lot of work, and it is. Iwog is still in denialSybrib says

    EMan says



    isn't investment, all money is made on initial sale.


    Eman,


    Iwog, E-man and SF Ace have been boasting on here for a long time about the Gravvy Train their R.E. investments are.


    Also, I have a colleague, who is a lot more discrete, is using part of the R.E. positive cash flow to put kids through elite private K-12 whilst residing below the radar in a neighborhood that our Fortress Resident colleagues would be ashamed to be seen in. You'd never know s/he is doing so well unless you knew. So I think it can be done. It's just not for all of us.

  24. ¥


    Follow
    Befriend
    35 threads
    5,700 comments
    Bellingham, WA

    24   12:11pm Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    Yet we keep getting overall inflation. How come? It's been over three years now.

    when the bubble machine broke down in 2007 the government machine was turned on in 2008:

    http://research.stlouisfed.org/fred2/graph/?g=13X

    Also, interest rates have been pushed to the floor:

    http://research.stlouisfed.org/fred2/graph/?g=13Y

    supporting home prices.

    I question the assertion that we are getting "overall" inflation. Home prices are still falling in the face of all the intervention. Rents are sticky but that's only where employment is differentially better.

    Unless the employment picture gets materially better things are going to break again. Millions of households are living free in default. 2-year funemployment checks ends at the end of this year, then it's back 26 weeks (peak unemployment was in early 2009 so people are rolling off anyway)

    http://research.stlouisfed.org/fred2/graph/?g=13Z

    Dunno how the Republicans controlling the House figures into this. If they walk their talk this year and next, kiss your ass goodbye.

  25. ¥


    Follow
    Befriend
    35 threads
    5,700 comments
    Bellingham, WA

    25   12:18pm Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    You're going to be amazed at how much money is available when the next big thing hits

    There are other possible futures out there, you know.

    $10 gas. The Republicans here and in DC blowing up the system like the end of Fight Club. Half the economy is still doing pretty good. Half isn't. We're losing what we had going for us in the 1990s and I don't see it coming back, since the 990s were built on the expanding trade in China and a global oil glut, two things that are reversing on us now.

  26. B.A.C.A.H.


    Follow
    Befriend (6)
    8 threads
    2,720 comments

    26   1:20pm Sun 10 Jul 2011   Share   Quote   Permalink   Like   Dislike  

    Troy, I suggest "ignore"

Clara is moderator of this thread.

Email

Username

Watch comments by email
Home   Tips and Tricks   Questions or suggestions? Mail p@patrick.net   Thank you for your kind donations

Page took 330 milliseconds to create.