Comments on: Morgan Stanley Spent $23 Billion to Shore Up Money Market Funds

By: Allan Baraza

Allan Baraza — Mon, 27 Oct 2008 12:48:00 +0000

wow..they seriously need to team up with a commercial bank..something like the merrill – BofA deal. How long will it take them to build up deposits? at this rate they could bleed themselves dry.

By: Anonymous

Anonymous — Mon, 27 Oct 2008 11:57:00 +0000

Money, once earned, is a very personal item. Where 'they' put their money after withdrawal from a MS Fund is 'their' business.

I suspect most people taking withdrawals placed their money in some sort of US Gov issues. Was this a smart move? I will let you know when my crystal ball is repaired.

Since the late 1960s I have allocated some of my monthly income to purchase of physical gold. Was it a smart investment? No. Do I sleep well at night? Yes.

Sometimes peace of mind is worth more to an individual than a high return.

By: eh

eh — Mon, 27 Oct 2008 07:34:00 +0000

Morgan Stanley clients withdrew almost one- third of their cash from money-market accounts last month,...

Why? Where are they putting the money instead? Under their mattress? In a passbook account? Buying FDIC insured CDs? Or treasury debt (that earns next to nothing in this panic)? Do these people seriously believe their money is in danger? I could understand it if it was mutual funds. Anyway, I park my money in MMFs and have no anxiety about it.

BTW there has recently been a rather spectacular and rather odd (what I will call) yield inversion. Here you see how SWTXX, a tax exempt MMF from Schwab, yields more than SWVXX, which is taxable. At this point I have not seen a good explanation of why the yield on SWTXX rose so dramatically not long ago -- before that it was down around 1.30%, and last week it was briefly above 3.5%. Why the volatility?