earlier this yr i had my moneymarket sweep go into a Pennsylvania muni and after i saw the first mentions of ARS security problems in jan/feb i looked at the holdings and noticed that about 80% of it were variable rate notes and have had it since then in cash. With rates so low now its pointless to risk a possible 5%+ loss just to get an extra 1-2%, looks like the rate cuts are working lol
This does mark the beginning of the end of Money Market Accounts. I would estimate, from my understanding of the situation that there could somewhere between $8-12 trillion in over-valued assets in various asset classes that needs to be re-valued. We haven't even hit the $1trillion mark in writedowns w/ this subprime debacle and ultimately I think it will be just the tip of the problem. It is also fair to say we have lost a few trillion in real estate so far, meaning we have A LONG way to go. Capitalism passes this $8-12 trillion hot potato around burns a few people who get a hold of it until it finally explodes in the last man's face. Socialism spreads this loss around evenly amongst everyone. How will this play out? I believe we will continue to run up a trade deficit and pay with our rapidly depreciating currency and think we pawned our debt off on the rest of the world. The Chinese will continue to buy our treasuries and will pick a strategic day or two or a month to sell most of them and blow up the bond market. They have no interest to do that, YET. The bubble has begun already in corporate bond market, as, look at the yield Shitigroup promised to pay the Chinese gov't and most recently the proposed debt package Thornburg has proposed. Capitalism will prevail and ultimately the holders of corporate debt will have the hot potato explode in their faces. In light of that, keep on buying up bonds you sovereign wealth funds, and Chinese Gov't and Abu Dhabi because we need you... to take this ticking time bomb from our hands.
strange fruit growing from dim dare trees.... not to long ago, day used ta do dose sort of tings.... cep-ins, day used to take pictures and have parties