This week we saw massive inflows into money funds. Commentators quickly seized on this as a sign that investors are fleeing stocks. While that may be the case, we want to point out that distortions are beginning to occur due to the use of banks as the default sweeps by brokerages. Whereas before "safe harbor" money would quickly appear in money fund flows, now there's a lag before investors manually shift the cash info money funds. We also want to remind people of the seasonal and volatile nature of "cash". Because month-end was on a Wednesday (when ICI's numbers come out), last week's outflow, and then this week's inflows, were magnified.

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