Read somewhere that there was $50 trillion in MMFs. With hedge funds performance YTD so poor they will scramble to catch up. Indeed, many are fighting for their existence. And, they were poorly positioned for last week’s rally. If we get a continuation of the rally that began last Tuesday things should get very interesting.
This guy, HarryNewton, is getting annoying, he has been so right:
The biggest bear of them all is Professor Nouriel Roubini. His dire predictions would be less irritating if they hadn’t been so right. Here are the main elements of Nouriel’s present outlook:
Tsunami of corporate defaults; 2-year U-shaped U.S. recession that threatens to turn into an L-shaped one if policymakers do not regain control of the financial system; global re-coupling to the U.S. will advance from non-U.S. markets to non-U.S. real economies – not even the strongest emerging markets such as Brazil and China will escape global re-coupling; vicious cycle of deflation in goods markets, labor markets, commodity markets, financial markets, corporate and household earnings, and aggregate demand; de-leveraging to reduce excess debt in municipalities, households and some firms; U.S. stock markets declining another 20-30%, bottoming fall 2009 at the earliest, then moving sideways for years post-recession if growth remains anemic as it did in Japan after its 1990s real estate and equities bust; U.S. unemployment rise to reach 8-9%; the demise of the shadow banking system.
