Immediately after Lehman Brothers failed, a money market mutual fund called Reserve Primary "broke the buck"--it did not have enough money in its coffers to pay the shareholders what they'd had. Since money market funds are essentially used as bank accounts, this was a big problem--and it triggered a bank run on the money markets, which ended only when the government stepped in and said it would backstop these funds.
JP Morgan’s Nikolaos Panigirtzoglou put a fascinating report out last week, looking at supply and demand in the global bond market in 2014. And although I consider myself something of a bond nerd, I was genuinely astonished by some of the charts he put together, starting with this one:
Flows into equities this month have been breaking all kinds of records, and they've spurred a lot of chatter about a "Great Rotation" out of fixed income funds and into equity funds as stocks climb higher.
By John M. Mason: On Sunday I reported that funds have been flowing back into money market funds since late October and early November … a three-month move. Now, the Investment Company Institute (ICI) confirms this flow of funds.