Say good-bye to that pension they promised you!
Where did all that money go?
"Credit crunch highlights risks in money markets; Funds exposed to defaults, volatility" by Ross Kerber/Boston Globe October 29, 2007
How safe is your money- market fund?
For investors who do not have the stomach for the ups and downs of the stock market, money-market funds have boomed in recent years as a haven for consumers to park their money.
Supposedly. But since summer, problems have cropped up in several large money-market funds, showing that to achieve higher returns and attract more customers, some money-market managers may have been investing in riskier holdings.
Earlier this month, Wachovia Corp. of Charlotte, N.C., disclosed a $40 million loss tied to money-market funds at its Evergreen Investments unit in Boston. Evergreen's largest money-market fund holds a stake in at least one of what are known as "structured investment vehicles," or SIVs, complex financial instruments that have become difficult to trade as credit problems have spread throughout the economy since the summer.
Boston mutual-fund giant Fidelity Investments and another large Boston-based fund company, Bank of America Corp.'s Columbia funds, also have significant holdings in SIVs, corporate filings show.
The institutions say their funds are in good shape overall. But money-market managers might be in for a difficult time. On the other hand, the problems have not dampened investors' enthusiasm for money-market funds overall, said Peter Crane, whose website based in Westborough, cranedata.us, tracks the industry. He says investors have put more money into these funds than they have withdrawn nearly every week since August. Total holdings in US money-market funds are approaching the $3 trillion mark.
Wall-Streeter richers eat like kings while the Amurkn peasant is fed shit!!!
Unlike mutual funds that invest in stocks for the long term, money-market funds invest in US Treasury bills and other short-term securities that allow them to pay slightly more interest than products like certificates of deposit.
Money-market funds aren't insured like bank accounts but are perceived as safe because most invest in government securities, or government-backed mortgages.
Investing in this corrupt bankrupt, looting government is "safer" than the market?!
Pfffffffffftttttttt!!!!!
There will BE NO RETIREMENT (if you survive, that is)!!!
To increase their returns, many also invest a portion of their funds in "commercial paper" such as mortgage loans packaged into SIVs or corporate debt backed by assets like real estate. Fund companies earn lucrative fees managing money-market funds.
Well, isn't that just special!
I'm glad someone is benefiting while my shirt is stolen and I get sick!
The price of a share in a money-market fund is fixed at $1. If the value of the holdings in the fund falls much below $1 a share - a disaster known as "breaking the buck" - the fund company must take steps that can include eating the losses or dissolving the fund.
Overvalued holdings in money-market funds are more likely to be a serious problem for fund companies than for investors.
At Fidelity, for example, the money-market funds hold debt issued by various SIVs, including the largest, Sigma Finance Corp., operated by a London firm called Gordian Knot Ltd. Other Fidelity holdings include two run by Citigroup Inc., Beta Finance Corp. and Centauri Corp. Some specialists wonder if Fidelity has invested in SIVs too aggressively as it sought to boost the interest rates it can pay investors.
You know, the IMPORTANT PEOPLE!
Joseph Mason, a Drexel University finance professor:
"Fidelity seems to be one of the biggest culprits as far as chasing yield."
Vincent Loporchio, Fidelity spokesman, in response:
"Our first priority is to ensure that credit quality of the holdings in the funds is of the highest order, [and noted the management meets SEC requirements]. Fidelity has a rigorous research process to approve SIV debt securities for purchase in the money-market funds. We have been very selective in this approval process and have an in-depth understanding of each SIV investment manager, the quality of their asset portfolio, liability management, and overall operations."
I'll remember that for the "We didn't now" legal denials later.
How ORGANIZED you all are.
And if you are not, then you just lied, sir!
SIVs generally buy longterm securities including some backed by mortgage portfolios, financing them by issuing their own shorter-term securities like notes or commercial paper. These securities have become more difficult to sell lately as they mature, however, raising the chance of default.
An Evergreen spokeswoman declined to discuss the fund's SIV holdings in detail or describe the reasons for the $40 million writeoff. Evergreen and Wachovia have said previously that they are "committed to preservation of capital in the money-market funds" - in this case meaning the parent would make good on losses in the funds so that investors would not be harmed."
I object to the language to describe exploiting, paper-pushing, miserly, money-grubbing banks and corporations making use of the word "parent," as if the "investor" is the "child" they must protect.
And for those with nothing or near nothing, we're fucked!
BILLIONS for WAR, but, awwww, you've heard it all before!
Pfffffffffffttttt!
Whooops!
There goes your pension, Amurkn shit-chewer!
Along with your homes, too!
