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U S Money Market Funds Requesting Halt In Redemptions

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http://www.iii.co.uk/news/?type=afxnews&am...;action=article

WASHINGTON (Thomson Financial) - The US Commodity Futures Trading Commission is denying a request from Sentinel Management Group to halt redemptions from Sentinel's money-market fund, saying it lacks the authority, according to CNBC television.
Sentinel requested the halt because of problems meeting significant requests from clients.
There is unconfirmed talk on the street that many money market funds including BlackRock, Schwab, and Fidelity may have attempted to enhance their investment returns by purchasing low-quality debt instruments and now face withdrawal problems because they cannot value these assets in the current environment.
Thomson IFR Markets says, "this is a scary development. If this problem spreads to Vanguard, Fidelity, and other large money market funds, funds with trillions of dollars, we shudder to think that we might see an old fashioned 'run on the bank'."
Into early afternoon, Tuesday, the money markets had not encountered liquidity problems and the Federal Reserve did not inject any liquidity in the morning.

This will dwarf the subprime problems. Think in terms of 1929.

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http://www.iii.co.uk/news/?type=afxnews&am...;action=article
WASHINGTON (Thomson Financial) - The US Commodity Futures Trading Commission is denying a request from Sentinel Management Group to halt redemptions from Sentinel's money-market fund, saying it lacks the authority, according to CNBC television.
Sentinel requested the halt because of problems meeting significant requests from clients.
There is unconfirmed talk on the street that many money market funds including BlackRock, Schwab, and Fidelity may have attempted to enhance their investment returns by purchasing low-quality debt instruments and now face withdrawal problems because they cannot value these assets in the current environment.
Thomson IFR Markets says, "this is a scary development. If this problem spreads to Vanguard, Fidelity, and other large money market funds, funds with trillions of dollars, we shudder to think that we might see an old fashioned 'run on the bank'."
Into early afternoon, Tuesday, the money markets had not encountered liquidity problems and the Federal Reserve did not inject any liquidity in the morning.

This will dwarf the subprime problems. Think in terms of 1929.

My theory is someone pumped in fake mbs, and its the biggest bank robbery in our century, this is just the start, as most of us have said last week.

Money out of the bank each day, parent have been doing the same.

Edited by crash2006

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Surely money market funds haven't been investing in mortgage trash. They haven't been putting money destined for cash equivalent holdings into high risk debt-fuelled crapola have they?

Just like German local industrial invesment banks that have been buying up the same trash from the States?

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CLIENT : "Where''s my fu***ing money? Give it back to me, now!"

FUND MANAGER : Sorry sir, we invested it in Casey Serin.

Edited by OnlyMe

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Please please listen to me, I beg you all not to run into government bonds. It's a trap, you'll be locked in a low yielding investment when soon everyone will want out of any paper, even banknotes in any denomination whatsoever.

I was thinking there was a chance we would weather the credit meltdown with a mild 10-20% stock market correction and a nice HPC. If moneymarkets are up to their neck in trash all bets are off. A banking consultant friend of mine who has intimate knowledge of what goes on at the higher levels said a few weeks ago that what is brewing has depression written all over it. He is an extremely conservative and level-headed individual and not given to extreme views so I take what he said seriously.

IMO the US will ride out a severe recession somewhat better than we will this side of the Atlantic (old sneeze:cold analogy still true) so I am staying put with mostly US$ but moving funds gingerly from money market to FDIC backed CDs. Just in case this story is not an exaggeration.

Thinking about it--house prices are up 300% in the UK--exactly where have all those tens of trillions come from?

I think we all get the picture. :o

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Please please listen to me, I beg you all not to run into government bonds. It's a trap, you'll be locked in a low yielding investment when soon everyone will want out of any paper, even banknotes in any denomination whatsoever.

What is the problem with gov bonds? I mean they're fairly low yield but they're safe....no?

Are you talking about NS&I products here too?

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A fall in export prices and sales A fall in overseas loans leading to a reduction in government capital spending A fall in residential construction.

<LI>migrants, particularly those from Italy and southern Europe, being resented because they worked for less wages than others despite having relatively little in the way of family or friends to call on for help.

1929.

Edited by crash2006

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This sounds very serious indeed. I checked the mix of one of my pension funds today (I am in the safest mix anyway), I think they have mostly money market, bonds, property.

I am about 70% in money market funds!* They are paying arpound 5.06% as of today which is above the average 4.9% paid on 3 month CDs--where are they getting the extra kick from as CDs are usually slightly higher than MM funds which are more liquid. :o

*15% large cap international stocks, 15% mostly US Government Bonds and some AAA and above corporate.

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Hang on. So the Fed has been injecting liquidity into the markets to allow money markets to pay out to people who redeem their funds. Surely then everyone would want to redeem their funds, to get the money before it falls in value as everyone gets their money out?

It's A Wonderful Life, isn't it? I don't really see Dubya coming up with a rousing speech to prevent self-interest from taking priority.

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Something is up--I just logged onto my brokerage account and the interest on my MM fund has gone up by the largest amount in a day I have ever seen apart from whewn the Fed have hiked (from 5.06 to 5.15%). Incentive to stay in?

Anyone got the feeling all hell is about to break loose?

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Something is up--I just logged onto my brokerage account and the interest on my MM fund has gone up by the largest amount in a day I have ever seen apart from whewn the Fed have hiked (from 5.06 to 5.15%). Incentive to stay in?

Anyone got the feeling all hell is about to break loose?

Keep dreaming RB. You cashed out way to soon and have spent years on here trying to justify it and in hoping to take everyone else down with you. You keep watching your MM account - it can never hope to match the HPI youve missed out on. :lol:

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Guest DissipatedYouthIsValuable
Hang on. So the Fed has been injecting liquidity into the markets to allow money markets to pay out to people who redeem their funds. Surely then everyone would want to redeem their funds, to get the money before it falls in value as everyone gets their money out?

It's A Wonderful Life, isn't it? I don't really see Dubya coming up with a rousing speech to prevent self-interest from taking priority.

Unless trading is called to a halt, what is in place to prevent investors from sucking out all of that liquidity each day? Although I suppose the question then is, where would one put large gains to keep them safe? I know some people will say gold, but due to leasing and some other games, it seems entirely possible to play with this market so as to make it appear that there is not a strictly defined limit on supply.

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Guest Popalot
Keep dreaming RB. You cashed out way to soon and have spent years on here trying to justify it and in hoping to take everyone else down with you. You keep watching your MM account - it can never hope to match the HPI youve missed out on. :lol:

Why so bitter HP Convert? RB always sounds a whole lot happier than you do :P

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Money market funds are supposed to invest in safe liquid short term debt. Its amazing they need to halt redemptions already, the bloomberg article claims "most securities have simply ceased to trade". Historically credit crunches like this have only happened after a serious stock market meltdown, not after a pithy pullback from an all time high. When the crash hits this financial apocalypse will make the great depression look like a quaint curiosity.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Sentinel's investments include short-term commercial paper, investment-grade bonds and Treasury notes, according to its Web site.

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Why so bitter HP Convert? RB always sounds a whole lot happier than you do :P

Look pal it isnt me banging on about things hatching from the mud and the mother of all doom decending on us.

Im happy as larry today - seen Q3 bonus stats forecast - yum yum yum.

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Guest Popalot
Look pal it isnt me banging on about things hatching from the mud and the mother of all doom decending on us.

Im happy as larry today - seen Q3 bonus stats forecast - yum yum yum.

You have just typecast yourself nicely. Thanks.

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Unless trading is called to a halt, what is in place to prevent investors from sucking out all of that liquidity each day? Although I suppose the question then is, where would one put large gains to keep them safe? I know some people will say gold, but due to leasing and some other games, it seems entirely possible to play with this market so as to make it appear that there is not a strictly defined limit on supply.

the problem is companies dont WANT to give you your money and say its in your interest, lol. you know they are thinking about themselves at this moment i time.

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Money market funds are supposed to invest in safe liquid short term debt. Its amazing they need to halt redemptions already, the bloomberg article claims "most securities have simply ceased to trade". Historically credit crunches like this have only happened after a serious stock market meltdown, not after a pithy pullback from an all time high. When the crash hits this financial apocalypse will make the great depression look like a quaint curiosity.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Here is the full letter from Sentinel:

I want my money back & I want them now - > Stock Market Says No

http://www.thestreet.com/tsc/pdfs/LETTERTOCLIENT.pdf

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Here is the full letter from Sentinel:

I want my money back & I want them now - > Stock Market Says No

http://www.thestreet.com/tsc/pdfs/LETTERTOCLIENT.pdf

Wow, thank God I got out of my Fidelity funds early last week. This could end up really really messy.

I'm almost to a point where I'm worried about keeping the fund cash in a "stable" bank account now (cue Goldfinger).

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Wow, thank God I got out of my Fidelity funds early last week. This could end up really really messy.

I'm almost to a point where I'm worried about keeping the fund cash in a "stable" bank account now (cue Goldfinger).

take it out lol, just incase.

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Guest DissipatedYouthIsValuable
the problem is companies dont WANT to give you your money and say its in your interest, lol. you know they are thinking about themselves at this moment i time.

****** it, I'm planting double the food and getting a couple of guns. One for any investment bankers I catch dipping their fingers in my pocket. That one I'm going to look after really well.

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