Comments on: Paribas Freezes Assets of Three Funds http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-hedge.html Mon, 23 Nov 2009 06:07:28 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Yves Smith http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-hedge.html#comment-336 Yves Smith Fri, 10 Aug 2007 01:03:00 +0000 http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-funds/#comment-336 jck,<br/><br/>Fair comment, and I stand corrected, but perhaps a more accurate way of putting it is the $1 NAV requirement is SUPPOSED to keep that sort of thing from happening. jck,

Fair comment, and I stand corrected, but perhaps a more accurate way of putting it is the $1 NAV requirement is SUPPOSED to keep that sort of thing from happening.

]]> By: jck http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-hedge.html#comment-333 jck Thu, 09 Aug 2007 22:00:00 +0000 http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-funds/#comment-333 This could happen in the US...The money market funds in question do not use leverage, they are struck in ABCP paper extendible, where liquidity has vanished since the American Home Mortgage bankruptcy filing.AHM has not paid for obvious reasons and has extended its CP (perfectly legally) and now holders of similar stuff are realizing that gave a free liquidity-credit-crunch option to the issuers...a bit late... This could happen in the US…The money market funds in question do not use leverage, they are struck in ABCP paper extendible, where liquidity has vanished since the American Home Mortgage bankruptcy filing.AHM has not paid for obvious reasons and has extended its CP (perfectly legally) and now holders of similar stuff are realizing that gave a free liquidity-credit-crunch option to the issuers…a bit late…

]]> By: Yves Smith http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-hedge.html#comment-330 Yves Smith Thu, 09 Aug 2007 21:12:00 +0000 http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-funds/#comment-330 Thanks for your correction. It would be well nigh impossible for a US "money market" fund to have that sort of decline in such a short period. You'd have to have substantial leverage. In addition, US money market funds have a $1 NAV requirement, which means they are supposed never to lose principal. Thanks for your correction. It would be well nigh impossible for a US “money market” fund to have that sort of decline in such a short period. You’d have to have substantial leverage. In addition, US money market funds have a $1 NAV requirement, which means they are supposed never to lose principal.

]]> By: jck http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-hedge.html#comment-329 jck Thu, 09 Aug 2007 20:53:00 +0000 http://www.nakedcapitalism.com/2007/08/paribas-freezes-assets-of-three-funds/#comment-329 Yves<br/>They are not hedge funds, they are money market funds euro style or rather french style with an "enhanced" or "dynamic" element. Yves
They are not hedge funds, they are money market funds euro style or rather french style with an “enhanced” or “dynamic” element.

]]>