The LA Times wrote yesterday, "Sidelined cash is huge, but is it antsy to go somewhere?". The article discusses the "Wall of Cash" theory and says, "There's no doubt that some fickle money-fund cash will flow into stocks; indeed, after peaking in early January, money fund assets have edged lower as the stock market has surged. But money funds might not provide as much juice as the bulls expect. For one thing, much of the cash flow into money funds over the past two years had little to do with the collapsing stock market, said Peter Crane, chief executive of research firm Crane Data. Corporations, which account for two-thirds of money-fund assets, have built up funds for purposes ranging from emergency reserves to bankrolling mergers, and are unlikely to put that cash into stocks, Crane said. That's a big reason why overall money-fund assets are down only 4% from their mid-January peak despite the torrid market rally since early March." The article quotes Crane, "Money is trickling back in off the sidelines, but the thought that this wall of cash will come pouring back into the market overnight is ridiculous. If it were going to do that, it already would have."
