If you want a stark sign of just how bad things are in the financial world at this point, Treasury bills with maturities inside a month are currently trading with NEGATIVE yields. Investors are effectively willing to pay the government to protect their money. Nothing like that has happened since the Great Depression.
LIBOR has had record highs with about 0 overnight lending. The worldwide financial system is collapsing before our eyes. Simply incredible.
I forget which Money Market account it is, but one of the big ones (with sizeable Lehman Brothers holdings) became the first MM to trade with the dollar valued below a dollar over the weekend.
That’s bad.
My impressions are that the underlying fundamentals are still strong, but I could be mistaken.
I forget which Money Market account it is, but one of the big ones (with sizeable Lehman Brothers holdings) became the first MM to trade with the dollar valued below a dollar over the weekend.
That’s bad.
I read that it’s not the first. It happened sometime last year to another one. I don’t think it’s fatal or anything.
The way these money market funds work is that they typically invest their money in ultra safe short term stuff and basically payout on a daily basis to their investors. They pay out enough to reduce their fund share price to $1 every day.
To go under $1 they would need to lose money day to day which is supposed to be impossible because they are making ultra safe investments. But of course as we’ve seen recently there’s some institutions once thought invulnerably large and secure that are now going under.
I don’t know if this is supposed to be biting sarcasm, but if it is I got a kick out of it.
If it isn’t, well, I dunno what to tell you. If the financial system goes down, as looks increasingly likely (chances have moved over the past few weeks from “Dangerous to your star fleet, commander, not to this battle station” to “We’ve analyzed their attack, sir, and there is a danger”), the business world will soon follow. Credit is the lube that keeps the economic world fucking, and without it we’re all in a world of shit. And it’s looking more and more like that bottle is running empty.
Seems like there’s plenty of taxpayer money available to keep things moving.
My Tivo still works.
I assure you, it was a sarcastic quoting of McCain :) Didn’t he say something like that on Monday morning?
How I really feel… well, I’m not sure if I should be terrified or just scared silly.
Why you don’t have your own financial analysis show on CNBC is beyond me. Needless to say, I would like to subscribe to your newsletter.
I’m sticking with ‘scared silly’ for now. I may downgrade to ‘sobbing on the kitchen floor’ later, depending on my market valuation.
This metaphor says terrifying things about your sex life.
Hey, its all dicks, pussies and assholes, right?
My company’s increasingly looking like the next big one to go down and probably pretty soon, but it’s been a surprisingly fun day at work. No one’s doing much actual work, and most of the chatter is light hearted gallows humor.
Same here. We’ve got a realtime ticker up on the plasma screen and making soup line jokes.
I wish you guys luck. Here’s hoping you all land on your feet!
Yeah, good luck, dudes.
The other side of the coin (I.E. if the fund goes under $1/share) is that the company managing the fund needs to pump money into the fund to move it to the $1/share target. Of course, you’ve got to have liquidity to do that, and I think that’s the problem with the fund in question.
Oops. Bit of a misunderstanding here. I meant that my company was also making gallows-humor jokes and not getting work done. As far as I know I don’t work for a major financial institution. If I am, I deserve a bigger severance package!