November 16, 2007

Think your money market funds are a nice safe places to park your cash? Wrong. Be afraid. Be very afraid.



Guess who was one of the biggest investors in toxic SIVs and CDOs?

Money market funds.


Your money is not safe in these safest of safe funds. Get it out. Now. If you need to park cash, get it into FDIC insured accounts or US t-bills that even though the dollar will devalue, unlike money market funds you won't lose your principle.

Do it today. You'll be glad you did.


GE Money Fund Breaks the Buck; Others Scramble to Cover Losses

A short-term institutional bond managed by General Electric Asset Management suffered such extreme losses from mortgage and asset-backed securities that it has offered investors the option of redeeming their holdings at 96 cents on the dollar.

Bank of America Corp. (BAC), and others, are reportedly propping up their money-market funds in a frantic effort to cushion against possible losses on debt issued by structured investment funds.

40 comments:

Anonymous said...

HP needs a new motto...

"HP: So right, even a dopes can figure it out."

Anonymous said...

If you can't withdraw it as cash, and there are several reports of refusals to do so, try buying an ETF of some type and then transferring the security.

Anonymous said...

Hey, everyone call up E-Trade and see whether they're allowing redemptions.

Anonymous said...

The Shepple might wake up when the money markets melt down

Anonymous said...

Anyone with money in Indymac Countrywide or etrade deserve to lose it for being dumb

Anonymous said...

Hey, looks like pensioners in Florida and several other states are learning that Wall Street crooks are into their coffers for billions-over $2B in the state of FL alone.
Jeff

http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aYE0AghQ5IUA#

Anonymous said...

Fannie Mae's fuzzy math

It's Enron all over again
http://tinyurl.com/3ylwjd

Boom2Bust.com said...

"get it into FDIC insured accounts"

Keith, problems with that too. The way the FDIC is set up, stronger banks pay up to rescue the weaker ones, thereby becoming weaker themselves. If one bank fails, not a big deal. If a bunch of banks fail, well, you figure it out...

Anonymous said...

Go, Keith, Go...

Lets start a run on Money Market Funds - since they are not fdic insured, they will go down like banks in the 1930's... only there is no place to stand in line and get your picture taken...

How will the gov bail THEM out??? Bring them under fdic like the brits had to give a gov guarantee for Northern Rock?

How much money is IN MMF's?

What can Keith target next?

Anonymous said...

You can only invest in T-bills via brokers - they no longer issue certificates.

Is your BROKER safe???

Anonymous said...

My money market account in my 401(k) changed its name from "JP Morgan Prime Money Market Account" to "100% US Treasury Securities Money Market". It is now 100% in US Treasuries. Of course the yield is now down about 100 bps but that's ok. I only have it parked there for another 6-9 months or so...

Edgar said...

Anyone who watched this housing bubble and didn't check to see that their money market was insured deserves to lose it all. They, as much as anyone, enabled this mess.

Anonymous said...

Is it legal to cry Run in a crowded Money Market Fund?

Anonymous said...

Moved from money market to tbills today thank you!

Anonymous said...

It's legal to incite a run on money market accounts. It is illegal to incite a run on the banks. I already pulled out of the money markets. I'm in natural resounrces and metals now. Anything that requires the consumer to leverage to buy will drop in value. That means real estate. J6P is tapped out and so is his line of credit. Clownifornia has been living on borrowed time since the dotcon crash and it's time to pay up. Maybe they'll have to drop the free healthcare and college for illegal immigrants. More likely they'll drop it for American citizens first.

Anonymous said...

This still was an enhanced leverage fund, I believe. Whether or not more traditional funds are susceptible is open to debate, I assume.

keith said...

It's illegal to incite a run on the banks? I don't think so. Someone's gonna have to show me that law. Hell, that's what I want to do here!

Here's a shot - anyone with deposits greater than the FDIC maximums at e-trade, countrywide, indymax, washington mutual or wells fargo better be ready to lose everything

RUN ON THAT

Debbie said...

CHECK YOUR STATEMENTS!
Ahhh... beautiful Wells Fargo. I know just how THEY expect to get a little of the money they lost back. I looked at my statement today and out of nowhere was an 8 dollar "monthly service fee" that I had never been charged before. EIGHT DOLLARS. MONTHLY. If did not pick this up, they'd go ahead and keep on a chargin'. Imagine that spread over their whole customer base. Of course, when I called, they dropped it no prob. I seem to recall my sister the lawyer telling me that if they fix it, there is no damage done and therefore no unlawful deed that one could try to class action. So just charge unsuspecting customers some sort of fee and hope they don't catch it. What a scam.

westwest888 said...

Watch out. Fannie Mae and Freddie Mac falling like rocks. It turns out investors are upset that their accounting is different than every other company in the US (except maybe countrywide).


http://tinyurl.com/yofrsq

"The shares dropped 10 percent yesterday after a Fortune magazine article said Washington-based Fannie Mae altered how it measures the impact of mortgage foreclosures in a way that understates losses."

Anonymous said...

Where's DOPES?

Starbucks traffic DOWN!!!

http://tinyurl.com/3apx4f

Anonymous said...

Go with Canadian treasuries over US T-bills. You avoid the dollar destruction and are paid interest.

Anonymous said...

I have a Simple IRA with New York Life. Is this the same thing? It just says MainStay Blanace Fund B.

Andrew Hac said...

So what is the score today:

Americano dollar vs. Chinese yuan

Score:
Land of Hot Dog: 0
Land of Wonton: 1

Go, Wonton Soup !!!

Joe-6-pack and Jane-Zinfandel is beginning to feel the squeeze now. No more credit on the CC to do After-ThanksGiving-Friday sale, no more expensive toys for little Joe Jr. and Jane missy. No more taking a trip to Disney Land.

Man, Dude, I am like in heaven right now watching Joe and Jane squirming on their fat-asses !!!

grilled swiss w/onion rings said...

* NEWS FLASH *

LIBERTY DOLLARS & RON PAUL COINS SEIZED

USA TODAY 11/16/07 EVANSVILLE, Ind. (AP) — Federal agents raided the headquarters of a group that produces illegal currency and puts it in circulation, seizing gold, silver and two tons of copper coins featuring Republican presidential candidate Ron Paul.
Agents also took records, computers and froze the bank accounts at the "Liberty Dollar" headquarters during the Thursday raid, Bernard von NotHaus, founder of the National Organization for the Repeal of the Federal Reserve Act & Internal Revenue Code, said in a posting on the group's website.

Read in full link: http://tinyurl.com/34839u

nnj said...

Deb,

Same happend to me. After 20 years with my bank, a $15 fee out of nowhere with no detail or reason. The cust service agent didn't even know why it was charged. I would assume the method here is to charge everyone a fee and see what happens. Those who catch it get their money back with an appology. Im sure they will net a few million dollars or so.

Frank@Scottsdale-Sucks.com said...

LOL some clown posted this site on my blog today:

http://scottsdaleazrealestate.org

Apparently it's a new conduit for NAR spin and to try to dupe people that "It's A Great Time To Buy!"

There's only one problem, especially in Arizona:

"They Ain't Making Any More Loans!!"

Anonymous said...

CHECK YOUR STATEMENTS!
Ahhh... beautiful Wells Fargo. I know just how THEY expect to get a little of the money they lost back. I looked at my statement today and out of nowhere was an 8 dollar "monthly service fee" that I had never been charged before. EIGHT DOLLARS. MONTHLY. If did not pick this up, they'd go ahead and keep on a chargin'. Imagine that spread over their whole customer base. Of course, when I called, they dropped it no prob. I seem to recall my sister the lawyer telling me that if they fix it, there is no damage done and therefore no unlawful deed that one could try to class action. So just charge unsuspecting customers some sort of fee and hope they don't catch it. What a scam.
----------------------------------

I move my money around the banks alot as rates change and they pull this shit every time. WaMu, BofA, you name it. I now plan to make that call when the first statement arrives. Just life in America circa 2007.

What's worse is dealing with companies like Dishnet and Directv. They continue month after month sneaking in hidden charges. Then you get to haggle with some operator named "Billy Bob" in India.

I believe it is a well known tactic adopted by these scum bag companies to cheat any little bit they can from people not paying attention or who don't want to bother.

Can't people make money without such petty dishonesty. Is this what we have come too?

(Sorry to get off subject, just had to vent) ahhhhhh..... much better.

Mammoth said...

Speaking of “Petty Dishonesty,” Mortgage companies also have their tricks for ripping people off. Where are the regulators? Oh, that’s right – they take notice once the horse is out of the barn…

Sold my rental house on Oct. 31st, and am still waiting for the mortgage company to refund the money that was in escrow.

“We have to wait until the funds are cleared before we send you your money back,” I was told when I called them.

WTF?!! When the sale closed, the buyer’s money was instantly transferred to my account and ready to be used by me as I pleased the very next day. But the portion of the buyer’s money that paid off the mortgage on the old house needs to wait for a month in order to clear?

What is obvious - is that the mortgage company (First Horizon) has a pool of money which it withholds from the owners, and keeps the interest on this.

Where are the regulators?
-Mammoth

Anonymous said...


no more expensive toys for little Joe Jr. and Jane missy. No more taking a trip to Disney Land.


You mean no more people fighting for a $1000 Tickle Me Elmo?

Peter T said...

> "get it into FDIC insured accounts"
> Keith, problems with that too. (...) If a bunch of banks fail, well, you figure it out...

The FDIC is backed by the full faith and credit of the US government (unlike Fannie and Freddie with their implicit assumed guarantee). The government guarantees the deposits and regulates the banks in turn.

Peter T said...

> You can only invest in T-bills via brokers - they no longer issue certificates.

I have not done it, but I thought you could invest through their website TreasureyDirect.gov.

Peter T said...

> My money market account in my 401(k) changed its name from "JP Morgan Prime Money Market Account" to "100% US Treasury Securities Money Market". It is now 100% in US Treasuries.

Lucky you. I have a lot of my 401k in cash, but it is only to a quarter in treasuries. I would move it out if I know something better in my 401k but I don't.

Anonymous said...

There a slot machines in vegas with better returns.

PLUS free booze!

Anonymous said...

Capitol one money market accounts are FDIC insured.

Bad part is its an on-line account.

Edgar said...

Get a lawyer mammoth, I think that is illegal.

y-o-y turkey day data said...

Many retailers are already feeling the pinch -- department stores like J.C. Penney and Kohl's are seeing what they're calling a dramatic weakening in sales.

Consumer confidence has fallen, thanks to high cost of gas and the ongoing mortgage credit crisis. Fed Chairman Ben Bernanke announced to Congress that conditions may worsen before we see any signs of economic relief.

(are you joking ben?)

So even if you skip the $4 latte, you'll feel the pinch at the grocery store where milk is up 25 percent and eggs, 41 percent. In fact, the price of an average Thanksgiving dinner has shot up 11 percent -- the biggest jump in 17 years.

From the time you head out the door, rising gas prices have made the trip 39 percent more expensive than last year.

* * * Get This Keith! * * * The trip home will return consumers to a house that on average is losing value -- down 4.2 percent from last year. Thats about -$8,000!

Gone!

Bwwwaa! Happy Thanksgiving!

AG, another happy renter :D

extra butter please said...

Man, I wish I had just ONE of those rare Ron Paul coins!!!

****************************

Me three!

Anonymous said...

Credit Unions are much safer than a Bank any day!!! But I suggest T-Bills, Cash, Gold!!!! A Crash is coming but just be ready!!!

ApleAnee said...

Peter Schiff takes the chaos of the world and makes it brilliantly, elegantly simple.

http://tinyurl.com/2w5ew4

we are so screwed said...

It just says MainStay Blanace Fund B.

Did you mean a "balanced" fund? If so then it is invested in STOCKS and BONDS (mortgage backed most likely).

Abandon ship my friend, abandon ship...