In 2009, U.S. stock markets were able to rise despite a substantial fund flow headwind. It's hard to see how mere 'liquidity' could have driven the 2009 rally, as some skeptics claim. At least based on ICI data, U.S. equity fund flows were negative for the year.

Rather, the 2009 rally was probably more the result of sellers becoming unwilling to sell at lower price levels. While buying demand was diminishing, selling demand at lower price levels was probably drying up at an even faster rate. Thus prices had to rise in order to clear the market.

The combination of a rising market with negative fund flows is an encouraging sign for the future. Guess what could happen if fund flows significantly reverse and become a positive tailwind.

Read more at The Money Game.

Note the most recent weekly fund flow uptick:

Longer-term perspective:

Even longer term:

A lot of people have this false notion that the U.S. has suddenly, as a nation, started adding debt like never before. This is because we hear about these giant government debt numbers every day, but rarely hear about the private side of the equation -- which is even larger and is falling.

Thus the point here is to disprove the notion that America is massively adding debt. The government is, but the country as a whole (inclusive of the government binge), isn't. In fact, debt growth is slowing like never before in recent history.

See the full piece over at The Money Game.

In an email note, Charles de Trenck of research firm Transport Trackers highlights how shipping companies could face substantial write-downs. In a similar fashion to banks right now, some of their assets are being carried on the balance sheet at far higher values than the current market value. So expect their balance sheets to be far worse than they look right now.

Transport Trackers: Brokers have highlighted a new all-time low for container charter rates this week (and the BDI traded back below 4,000...psychology playing its role here both on up and down sides...though some tankers did better this week).

One of our main worries for 2010 is impairments of value on balance sheets for many ship classes delivered in recent years -- ONCE ACCOUNTANTS perform their duty-bound functions. Many banks, often European, will face same/similar issues on their loan books as well.

The damage will likely be to containers first, but some bulk will likely also take a hit. ... Another way to slice the distribution of troubles is by geography. In some geographies there are total bailouts, while in others there are few. Japan is getting hard hit at the moment.

Wholesale impairments on B/S have not happened in many decades. In the 80s it was bankruptcies after sometimes long drawn out dramas. ...How will it play out this time? Over the last year the HR index has declined some 74% -- and from peaks the declines are still a bit more.