Conference Schedule

Crane Data LLC’s website, http://www.cranedata.us, will soon have a “Calendar” section listing various “cash” investing conferences. In the meantime, we’ll post additional events on this blog thread. Please let us know if you’d like to add an event.

Upcoming “Cash” Conferences and Events (excerpted from Money Fund Intelligence):

* Commercial Paper Issuer’s Working Group Meeting, Jan. 18, New York. Peter Crane will present his “Money Fund Outlook ‘07”. (http://www.cpiwg.org)

* American Securitization Forum, Jan. 28-31, Las Vegas. * Money Market Expo, March 19-22, Orlando, Fla.* SRI’s Forum on ABCP, March 20-21, New York.

* New York Cash Exchange, May 30-June 1, New York. Peter Crane will host “Comparing Online Money Market Trading Portals,” with Elyse Weiner of Citigroup, Marianne Bamonte of LaSalle, and Paul Rice of TreasuryCurve May 30 and he will host “Strategies from the Money Fund Masters” with Geoffrey Gibbs of Deutsche, Jonas Kolk of Morgan Stanley, and Patrick Ledford of The Reserve June 1. (http://www.tmany.org)

* GFOA (Govt Finance Officers Assoc) Annual Conference, June 10-13, Anaheim, Calif.

* AFP (Association of Financial Professionals) Annual Conference, Oct. 21-24, Boston, Mass. (http://www.afponline.org)

* NAST, Fall 2007, Sunriver, Oregon

BusinessWeek’s Article “Why Cash Could Be King” in 2007

I originally posted the comment below in response to the BW article, “Why Cash Could Be King”, which discusses how money markets (though they’re light on fund content) might be the surprise winner in 2007. Of course, this prediction is no surprise to Crane Data….

The article is at: http://www.businessweek.com/magazine/content/06_52/b4015068.htm?chan=sprb_investing_outlook07.

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Review: Kudos to Businessweek for daring to be contrarian — 5% yields on “cash” (money markets) is tough to compete with. Your comment “(although money-market funds tend to lag a bit more)” is incorrect though. Money funds, in addition to offering more convenience and liquidity than banks, react more quickly than bank savings to Fed moves. So while rates have been rising they’ve been the better choice (and are likely to remain the much better deal until rates fall sharply). For top money funds and top bank savings, visit Crane Data’s new “cash” supersite, http://www.cranedata.us.

Seasonal Factors Drive Money Fund Assets

With the Holidays fast approaching, I’d like to remind any interested parties about the seasonal nature of money market mutual fund assets. Almost every yearend, assets decline due to Holiday spending, “window-dressing” by companies, and month-end and quarter-end payments. Cash is always scarce at month-end, moreso at quarter-end, and particularly at year-end. The rising demand for liquidity tends to push the Federal funds rate and repo rates above their target, and these higher repo rates in turn lure cash from money funds into the direct market.

In January and at the beginning of a month or quarter, we see the opposite — strong inflows which push rates down. Yearend bonuses, Holiday cash presents, monthly interest deposits, quarterly dividends, and semiannual bond coupon payments normally hit in the first week of the month.

Last year was an oddity. Year end didn’t see normal outflows and January was weak. We think this yearend should revert to normal, but we’d like to hear your thoughts.

Where’s the Money Coming From?

Money fund assets are poised to set an all-time record at just under $2.4 trillion, and institutional money fund assets already have at $1.4 trillion. Year-to-date, money market fund assets have increased by almost 15%, over $300 billion! Where’s all the money coming from?

We’d love to hear your thoughts. Our guess is that the big factors include: “disintermediation”, or cash deposits moving out of banks and brokerage banks due to pitifully low interest rates; asset allocation models increasing their cash holdings (cash not only looks good vs. stocks and bonds, but real estate and commodities have shown that they’re not such a good “hedge”); the “more dangerous world” theory (companies and individuals need a bigger cash cushion in the age of terror).