patrick.net

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.

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.

Welcome back , Malcolm!

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

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

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 ...