Monday, January 21, 2008

Beware banks’ bragging on earnings

Oct 19th 2007: Even 'safe' funds play with fire

Consumers view money market funds as conservative, but Fortune's Peter Eavis reports that some have dipped their toes in risky financial waters. A large Bank of America money market fund has over $600 million of exposure to Cheyne Finance, the structured investment vehicle (SIV) that recently defaulted on its obligations. As of Oct. 12, Bank of America's $67-billion Columbia Cash Reserves fund had approximately $640 million - or just under 1% of its assets - invested in Cheyne, according to Jon Goldstein, a Bank of America spokesman. "Up until now, Cheyne has been paying its maturities as they come due," Goldstein said. He added that Deloitte, the firm acting as receiver for Cheyne, said this week that it was pleased with the progress of efforts to refinance and shore up the troubled SIV

Posted by lvmreader @ 08:13 PM (531 views)
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