Mutual Fund Bloodbath: Fifth Consecutive Week Of Domestic Stock Outflows Leads To $25 Billion In Cumulative Redemptions

The deleveraging pain for mutual funds is never ending. Today ICI reported the fifth consecutive week of domestic equity outflows, which while not as bad as last week's unprecedented $13.4 billion in redemptions was still a massive $1.1 billion in outflows. This amounts to $25 billion in redemptions in the past 5 weeks alone, and increasing pressure for already cash-strapped mutual funds to accelerate liquidations of positions in a feedback loop. And if you have used leverage in this environment, good luck. Total 2010 outflows now amount to -$23 billion: how anyone can claim with a straight face that retail is in any way a factor for the market doing all it can to defend the 10k barrier is beyond comprehension. Once banks realize there are no reinforcements coming from the slow money brigade, watch for the selling to hit the afterburners as prop desks grasp that the first one out may be the only one not to lose it all.

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