WSJ: Money-Fund Flows Are a Risk Meter

By SIMON CONSTABLE


When investors start piling into money-market funds, it is a remarkably accurate indicator that credit markets are getting dicey, according to new research conducted by a pair of finance professors.
The study says the money-fund indicator can be just as accurate as more-wonky indicators of market risk, such as credit-default-swap spreads, which show the cost of insuring corporate debt against default.
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