Money market funds at risk?

Discussion in 'Economics' started by tropicaltrader, Jul 12, 2008.

  1. There are quite a few money market funds that invest in "safe" high quality debt instruments issued by agencies such as Fannie Mae. Are these now at risk?
  2. If you haven't heard yet, Fannie is bankrupt. Only a fool would keep their money with them knowing this.
  3. Korchnoi


    So is BSC, but BSC's dept is safer than that of GS. Fannie may be bankrupt, but their debt is as safe.
  4. Pit Bull - Martin "Buzzy" Schwartz

    Going for the Gold II

    page 162.....................


    1) keep some cash in the home safe...

    2) reduce account balances below 100K in bank accounts...

    3) payoff high interest outstanding debt using excess savings..

    4) keep mortgage debt (low interest) ...

    5) withdraw gold and valuables from safe debosit boxes and put them in house safe...

    "Buzzy what are you doing?"

    " It doesn't feel right. I'm going for the gold"
  5. Long term money market funds?
    perhaps they invest in Freddie/Fannie

    Short term money market, like the ones used by most online brokers?
    Nah, they only invest in short term T-Bills.
  6. Most money market fund investments have a maturity of 30-60 days... some are government, some agency, some are corporate.
  7. If you're concerned about risk, get into a "treasury only" fund or buy T-Bills directly.
  8. There's no such thing as a long-term money market fund. By definition, the maturity of their holdings must be 180 days or less.

    For your education, they don't only invest in Tbills. They can invest in agency bonds, govnt bonds, repos, CDs and corporate bonds. I suggest you look at the prospectus of some MMFs.
  9. MMFs are not insured by the Feds. but may have other counterparty insurance which MAY protect you from fraud etc.

    otherwise, you're just another swinging dick creditor in the event of default.

    some Fannie sort term paper was NO BID on Friday...

    that may change but it may not...

    sleep tight.

  10. Buy South Afrian goldbars and bury them under the yumm yum tree. Mark the spot with nice flowers growing and shrubs..
    #10     Jul 13, 2008