Money flows and funding costs are always important

Interesting facts in USD money markets:

• Commercial bank assets have stayed below their highs from the fourth quarter of 2008 and have been consistently below $12 trillion.
• Large time deposits have declined by close to 30% since September 2008. Borrowing has increased but still 40% below the highs pre-Lehman. Retail deposits have continued to inch up. Retail wants their deposit protection and large depositors have sought out other alternatives.
• Money funds, both government and non-government have declined since the first quarter of 2009. a good portion of this has been investors reaching for yield. The biggest gains have been in bond not equity funds. Bond fund have increased by over $400 billion which has relieved pressure on Treasury funding.
• Cash assets at banks have increased from around $350 billion to over $1.2 trillion. The demand for safety is strong.
• Yet, bank risk by LIBOR-OIS spreads have increased significantly. Highest level in a year.
  
• CP and CD rates are on the rise.
  

Does not suggest markets are near normal.