Money market giant freezes redemptions

[FRED]

Money market giant freezes redemptions
Sept. 16, 2008 (MarketWatch)

One of the first and largest money market funds has put a seven-day freeze on redemptions after the net asset value of its shares fell below $1. Primary Fund (RFIXX) a $62 billion fund managed by money market fund inventor The Reserve, said Tuesday afternoon that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero. As of 4 p.m., the value of the fund's share is 97 cents. The Reserve said that redemption requests received before 3 p.m. Tuesday will be paid out at $1 a share.

[Mega]

Re: Money market giant freezes redemptions

Fred, am sorry but i am a bit lost.........could you do a "Peter-Schiff" and cut it down to bite size bits for me?................Is this "Mega"?
Mike

[*T*]

Re: Money market giant freezes redemptions

Money market funds - the next big sh!tstorm...

[rj1]

Re: Money market giant freezes redemptions

Fred, am sorry but i am a bit lost.........could you do a "Peter-Schiff" and cut it down to bite size bits for me?................Is this "Mega"?
Mike

Money markets are thought by most Americans to be a kind of savings account that can get some higher interest, that's how safe they are viewed as.

They are never supposed to lose money. I think this was the 2nd one to break below a dollar in something like 25 years I heard. (For the record, Wachovia's Evergreen Money Market Fund was going to go under, but Wachovia put money in it to stop that.)

So say you had $100,000 in this fund and they stopped it at $0.97 to the dollar. Your $100,000 that you thought was as safe as a savings account had you lose $3,000.

[Tulpen]

Re: Money market giant freezes redemptions

For all holders of a margin account check your uninvested funds allocation. You might want to stay away from money market funds for the time being.

[LargoWinch]

Re: Money market giant freezes redemptions

Fred, am sorry but i am a bit lost.........could you do a "Peter-Schiff" and cut it down to bite size bits for me?................Is this "Mega"?
Mike

I think FRED said that even if you instruct Wall St. to keep your hard earned money in "ultra-safe" cash, they are likely to find a way to steal it from you.

[raja]

Re: Money market giant freezes redemptions

For all holders of a margin account check your uninvested funds allocation. You might want to stay away from money market funds for the time being.

My Ameritrade account sweeps cash into a Reserve money market . . . but it doesn't anymore.

I called them today, and they said they dumped The Reserve and now all the cash is held as cash until they find someplace safe to put it. Those Ameritrade customers with funds in the money market got 97 cents on the dollar.

Fortunately, I had just made some trades, so I had very little in the money market and only lost $100.

[walenk]

Ice 9

Merde. We don't get anything as gaudy and vulgar as a crash. We get Vonnegut's Ice 9. The value of your assets is undimminished, it's just unutilizable.

[jk]

Re: Money market giant freezes redemptions

if you don't like the money funds available to you, consider the etf bil, which just holds treasury bills.