I’d like to call on anyone who is able and familiar with issue surrounding money funds to check some blogs and try and bring sanity to some of these doomsayers. The Wall Street Journal’s MarketBeat Blog Discusses “When $1 Is Not Worth $1″, by David Gaffen (http://blogs.wsj.com/marketbeat/2007/11/15/when-1-is-not-worth-1/#comment-13890). While this isn’t the “world-is-ending” tone of most, the follow up posts are leaning that way. Please help join me in telling the world that money fund investors will be okay, that losses in SIVs will be minimal and manageable, and that investors are fine sticking with funds!
Thanks!
PeteC
On the one hand, it looks like we might get through “subprime” shock, with managers paying back some of their fees to paper over their own incaution. So if we keep the focus narrowly on this issue, the wild talk on the web is no more than the wind outside the walls.
But perhaps there are lessons still unlearned. Money funds have short enough duration to get out when the first canary sings. Last winter HBSC took the first write down for subprime — more than enough time for all the debt to roll over, before the storm struck. Yet until August, money funds were still buying.
Now, HBSC has warned about rising credit card delinquencies.
Storm winds are worse when faced on the open waters. Who is still out there riding the waves of ABCP?