Money-Market Fund Assets Crash 'Most Since Lehman' As Bank Deposits Rose Last Week
I saw this on ZeroHedge, Friday evening. The writer suggests this huge chunk of cash drained by institutional investors relates to tax payments for returns on extension, but that’s not at all likely.
I will go into a more detailed analysis tomorrow, but wanted to give you guys a heads-up. For now, a quick comment regarding tax payments. There was a large outflow in April because, even if you have an extension, all tax must be paid by April 15. No accountant working for a wealthy individual would postpone payment until October 15 because of the penalties and interest. And, assuming the outflow was for tax payments, it would mean institutional investors were drained to cover withdrawals for individuals because corporate returns must be filed by September 15.
I don’t have a good feel for what is really driving this, but it doesn’t look good.