Comments on: Even Top Corporates Having Trouble Raising Short-Term Funding

By: curious

curious — Sat, 27 Sep 2008 18:23:00 +0000

dir, just FYI… at Vanguard you choose which MMF you want all your trades to work to/from, and a Treasury-only MMFs is an option. (Is Fidelity not similar?)

By: Anonymous

Anonymous — Sat, 27 Sep 2008 12:21:00 +0000

Money market funds have some competition from tax exempt money market funds right now. Yields on tax exempt are going north of 4% while taxable money market remain around 2%. This is an anomaly that the financial media has ignore so far. Yield hunters are switching from taxable to tax exempt money market funds right now.

By: 350eng

350eng — Sat, 27 Sep 2008 10:57:00 +0000

I moved my cash to Fidelity’s FDLXX, US Treasury fund

By: Harmoniker

Harmoniker — Sat, 27 Sep 2008 08:28:00 +0000

dir,

Switch to Schwab. When you transfer funds into your brokerage account, it stays in an FDIC-insured bank until you invest it elsewhere.

Schwab does have a good selection of 4-week and longer Treasury Bills you can purchase from them at no commission. Plus they offer a range of AAA corporates and municipals, as well as CDs.

By: Yves Smith

Yves Smith — Sat, 27 Sep 2008 07:38:00 +0000

dir,

I know you’ve made up your mind, so this is a matter of curiousity. Doesn’t Fidelity have a government money market fund? Since trades are t+3, you’d still be able to transfer cash into the “core” fund before settlement. A nuisance, however, and still some residual risk.

By: dlr

dlr — Sat, 27 Sep 2008 07:19:00 +0000

I have checked at the Fidelity web site several times (they are my broker) and they have absolutely no information of any kind posted about the government insurance on their money market funds. Instead they have an analysis showing how much their various money market funds are exposed to Lehman’s, and AIG. Nothing at all as of this posting on how much exposure they’ve got to banks like Wachovia or Washington Mutual. I wouldn’t keep a penny in their money market funds if I had any choice in the matter at all. But the scumbags require that you transfer your money into their “core” money market fund any time you want to place a trade. Which is why I am moving my account from Fidelity even as we speak.

By: alan von altendorf

alan von altendorf — Sat, 27 Sep 2008 05:27:00 +0000

I can’t go to NPR without feeling insulted, so I’ll pass. Let’s agree that tradable commercial paper is another way of rewarding profitable, creditworthy companies and punishing losers. If funding dries up, Google will do alright. GE won’t. Tells us something about creditworthiness and cash flow. But cheap unsecured IOUs are the least important source of corporate finance. Paid in capital, bonds, debentures, and retained earnings matter more or less in reverse order. No profits, no retained earnings, no coupon payouts, etc. CP is a flyspeck on a healthy balance sheet.

By: Anonymous

Anonymous — Sat, 27 Sep 2008 05:20:00 +0000

or is it that they got used to paying really low interest rates, and are in sticker shock.

By: Mike M

Mike M — Sat, 27 Sep 2008 05:04:00 +0000

You would think Bernake or a fed/treasury insider had to run some game theory analysis on corporate/public reaction once the plan was tossed out there and come up with this deeper freeze as a unintended or intended consequence. Once credit markets really froze the issue would no longer be about bailing out wall street, instead attention would be focused on protecting main street, then the bailout and all its vagueness would be a slamdunk.

I find it hard not to believe this wasn’t heavily analyzed before the plan was tossed to congress.

By: Yves Smith

Yves Smith — Sat, 27 Sep 2008 04:42:00 +0000

I elaborated on the original post via an update. Hopefully that will help clarify issues a tad.