Posted on 01/03/2010 11:29:24 AM PST by blackminorca
Yet new regulations proposed by the administration, and specifically by the ever-incompetent Securities and Exchange Commission, seek to pull one of these three core pillars from the foundation of the entire money market industry, by changing the primary assumptions of the key Money Market Rule 2a-7. A key proposal in the overhaul of money market regulation suggests that money market fund managers will have the option to "suspend redemptions to allow for the orderly liquidation of fund assets." You read that right: this does not refer to the charter of procyclical, leveraged, risk-ridden, transsexual (allegedly) portfolio manager-infested hedge funds like SAC, Citadel, Glenview or even Bridgewater (which in light of ADIA's latest batch of problems, may well be wishing this was in fact the case), but the heart of heretofore assumed safest and most liquid of investment options: Money Market funds, which account for nearly 40% of all investment company assets. The next time there is a market crash, and you try to withdraw what you thought was "absolutely" safe money, a back office person will get back to you saying, "Sorry - your money is now frozen. Bank runs have become illegal."
(Excerpt) Read more at zerohedge.com ...
This is part the setup to grab 401Ks. It is coming down the pipe.
Who has the financial ping list?
I kinda gotta agree - I moved my money out of the 401K funds into the money market because it was “safe” - buy ammo, food and gold, we’re gunna need all of them.
I have a ping list thank you so much for the heads up. I was worried about this myself we pulled our money out of Allianz they are crooks anyway glad I did.
Ping
Step two: allow unlimited access to gov't
Count on it. Their (Reid, Pelosi, Obama) ultimate goal: no safe place for your (their) $.
ping later
1. See it.
2. Freeze it.
3. Seize it.
Seizing if it is done will be via devaluation of the $
Related
Developing nations emerge from shadows as sun sets on the West
Such disastrous losses have, for the most part, been incurred not by rich “fat-cat” individuals, but by the pension-funds, insurance companies and other institutional investors upon whom tens of millions of ordinary Western households depend – or thought they could depend.
Find later
True, they’ll get a lot of it that way but they won’t get it all until they can seize it.
Definite plus for the dems and key to "zero's" election.
I'm not that literate in high level, economics but it wouldn't surprise me to see Soros', Saudi and possibly Chinese fingerprints all over it.
put your money market fund in china where feds can`t touch it hahaha if u know wht I mean....
ping
bookmark
What does this leave us? Bank savings accounts at .33%?
Bank of Sealy
Ping!
The Fed needs help buying Treasuries, they can't do it alone, and with the China and Japan buying less and less, they need to change the rules of the largest pool of “safe money”, MM funds, in order to force them into Treasuries, thereby keeping, if only temporarily, interest rates low.
Please note from the article; Money market funds can reorganize with different rules.
These rules include the fed being the lender of last resort for additional Gov’t over site.
MM funds will attempt to do what's in their investors best interest while trying to continue to make a living.
If and when, we have a stock market decline, money will move to the new fed controlled MM funds which will be forced into buying Treasury debt with increasingly longer maturities, thereby keeping rates artificially low.
The alternative would be money going into the traditional MM funds, which would provide corporate America with EXTREMLY low credit.
The only reason this is not favored is that these corporations could then write their own ticket outside of Gov’t control.
By restricting access to your money, the gov’t is projecting their expectations that “Cash will be King” during a deflationary environment.
We need to watch what these MM funds do in the coming weeks and months.
If you get a notice/amendment to your money market account please READ IT. The rules may be changing.
Restricting access to your money with additional reliance on the Gov’t is HUGE PROBLEM.
This could be nothing short of a complete takeover of our financial system and by default, capitalism, and our way of life.
The largest amount of money invested in this country is invested in “safe” assets, Gov’t bonds, corporate bonds (sorry Chrysler) etc..
I think it was Will Rogers that said “I'm more concerned about the return of my money than with the return on my money”.
We may now be entering a time when what we thought was a safe place to park cash is no longer what we thought it was.
Gold is not the answer.
All the exits are being closed.
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