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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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They Broke The Buck On Money Market Accounts
NAV = $0.97
I heard this briefly today. I don't know if this is only for Lehman MMAs. Money Market money is invested in short term Treasurys for the most part. The fall out from Lehman is that they broke the buck on Money Market Accounts. These accounts are not guarnteed by any Federal or State Agency.
This means a $1 in is now worth $0.97.
There was a point in the mid 90's when they came close to breaking the buck, but were able to continue to give that guarntee.
Same is true of the 100K rule in FSLIC and FDIC in 1990, they decidedd to honor the more than 100K in an account in an institution that had failed. This time around I would not be so sure. The problems dwarf what has happened before.
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"Some Observer"
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