Friday, October 26, 2007

Money Market Funds May be at Risk

From The Wall Street Journal:

“Complex investments known as SIVs are roiling Wall Street and the world of high finance. But the investment vehicles also are threatening trouble in a seemingly unlikely place: money-market funds, the choice for many individual investors seeking safety.”

From Fortune:

“Money market funds are often the safest investments offered by fund companies, but several large money market funds own securities that were issued by structured investment vehicles (SIVs), the large, offshore funds that have recently made it into the headlines because the U.S. Treasury, along with Citigroup (Charts, Fortune 500), Bank of America (Charts, Fortune 500) and JP Morgan Chase (Charts, Fortune 500), are working on a plan to shore up them up."

"Money market funds are supposed to the safest fund investments of all. They're not supposed to get involved in liquidations. That sort of event is a nightmare for a money market fund."

From the San Francisco Chronicle:

“Despite all the problems in the financial sector, most experts say that as long as you keep your deposits at any one institution under the insurance limit, you shouldn't lose any sleep…

…The basic insurance limit is $100,000 per customer per type of deposit, although there are ways to get additional insurance by opening different types of accounts - such as retirement, joint and trust accounts.”

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