The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (30571)	4/14/2005 1:29:10 PM
From: ild	Read Replies (1) of 110194

How about a flight out of stocks into treasuries How about a flight out of junk into treasuries How about a flight out of mortgage securities into treasuries How about a flight out of corporates into treasuries Mish, although I'm in agreement with you about deflation, treasuries and some other stuff, as Hussman many times showed there are no flights from one assets to another. If one person sells one share of IBM then another has to spend same amount of money to buy it. What happens is mostly repricing of different assets. See, if Mickey sells his money market fund to buy stocks, the securities in that money market fund have to be sold to Nicky, whose cash goes to Mickey, who uses that cash to buy stock from Ricky. In the end, Nicky holds the money market securities that Mickey used to hold, Mickey holds the stock that Ricky used to hold, and Ricky holds the cash that Nicky used to hold. In the end, there is just as much “cash on the sidelines” as there was before. Money never goes into or out of the market, merely through it. hussmanfunds.com

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