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Thread: Money market funds start to take a dive

  1. #1
    God/dess Deogol's Avatar
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    Default Money market funds start to take a dive

    Reserve Primary Money Fund Falls Below $1 a Share (Update4)

    By Christopher Condon


    Sept. 16 (Bloomberg) -- became the first money-market fund in 14 years to expose investors to losses after writing off $785 million of debt issued by bankrupt Lehman Brothers Holdings Inc.
    The fund, whose assets plunged more than 60 percent to $23 billion in the past two days, said the Lehman losses forced the net value of its assets below $1 a share, known as breaking the buck. Reserve Primary, the oldest money fund in the nation, fell to 97 cents a share and redemptions were suspended for as long as seven days.


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    But don't worry - cuz Xan says there are no relations between things and all these sites are crack pot tin foil web sites.

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    Default Re: Money market funds start to take a dive

    Quote Originally Posted by Deogol View Post
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    But don't worry - cuz Xan says there are no relations between things and all these sites are crack pot tin foil web sites.
    Who said there won't be any pain? It is how you react to the pain and what actions you take now and in the future.

    There will be recessions, bubbles, busts, mispricing of assets, hurricanes, tornados, compaines going bust, job losses, inflation, deflation, crimes, terrorist attacks, wars, credit crunch, credit expansion.

    There is a difference between a deep cut wound that'll heel eventually and a cardiac arrest. Clueless idiots can't differentiate between these two.

    Bottomline: Get <b>P.E.R.S.P.E.C.T.I.V.E</b>

  3. #3
    goldengrl69
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    Default Re: Money market funds start to take a dive

    Instead of fighting we should work together and learn from one another.

    Now , is my my money market safe in a credit union?

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    Default Re: Money market funds start to take a dive

    Quote Originally Posted by goldengrl69 View Post
    Instead of fighting we should work together and learn from one another.

    Now , is my my money market safe in a credit union?
    Short Answer: Yes

    Long Answer:
    Depends on where your credit union invested your money market funds.

    Lets say they have lost 2-3% of the fund. The Credit Union will most definitely will make up that difference and most may even give an additional 0.5% to retain you as their customer.

    If your Credit Union don't have this extra money to distribute, they'll ask the fed for help. Fed may have to spend another $40-50B of tax payers money to 'fix' this whole money market issue just to avoid the confidence crisis.

    There will be regulations and lessons learnt from this.

    In the end, Taxpayer may lose $150-$200B in fixing this whole subprime/alt-a mess. It definitely hurts, and hopefully this is one time (or at least once every 20 years). We do bleed more on Wars and unnecessary items.

    But not taking care of this problem will hurt more.

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    Banned Melonie's Avatar
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    Default Re: Money market funds start to take a dive

    In the end, Taxpayer may lose $150-$200B in fixing this whole subprime/alt-a mess.
    add a trillion or so to that number, and you'll be 1/2 right ! Your 200 billion figure would depend on every 'toilet paper' security which has been sucked up by the FED window as collateral for 'loans' to troubled financial institutions eventually being 'bought back' at face value by the borrowing financial institution or liquidated at face value into private sector markets. Neither of these is going to actually occur ... and the US taxpayer will be on the hook for the additional losses.

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