I always like to pitch in to help solve a problem.
"Putnam, State Street feel heat on money markets" by Kimberly Blanton and Ross Kerber, Globe Staff | September 19, 2008
The panic sweeping the world's financial system hit Boston stalwarts Putnam Investments and State Street Corp., yesterday while the mutual fund industry struggled with billions of dollars in withdrawals from money market funds by investors worried about losing their cash.
Putnam abruptly closed the $12.3 billion Putnam Prime Money Market fund after corporations and other institutions that invest in it inundated the company with requests for their money back.
You know, this is what America looked like back in 1929, folks.
Hey, the history classes were worth it!!!!
It was the first time in Putnam's history that it was forced to close a fund in such a manner. The company said it plans to liquidate the fund slowly, to prevent its shareholders from losing money. The frenzy of withdrawals highlights how much investors, who once considered money market mutual funds as safe as cash, have been spooked by the credit crisis gripping financial markets.
WTF do you mean I can't have my money?
"There's a crisis of confidence in the system," said Putnam chief executive Robert Reynolds.
WTF? The tv people are telling me everything is fine!!!
On Wednesday, investors pulled nearly $90 billion out of money market mutual funds -among the largest single-day withdrawals - and as much as was pulled out during the entire preceding week. Analysts said most of the withdrawals were from corporations and other institutions. The sellers are trying to replace those money market fund holdings with even safer securities such as US Treasury bills, even though they are now paying interest rates as low as 0.071 percent.
Think 1929, folks!!!
While often treated like bank accounts, money market mutual funds are investment vehicles, and therefore can lose money. They also do not have the $100,000 per account FDIC insurance coverage provided to savings, checking, and so-called money market demand accounts available at banks. In addition to paying interest, money market funds attempt to keep their share prices steady at $1, so the value of the deposits remains intact.
Because of the run on money market mutual funds, the Bush administration is now proposing to provide them with FDIC-like insurance protection, The Wall Street Journal reported.
So ANOTHER BAILOUT FUND, huh?
Just HOW MUCH is the TAXPAYER expected to shoulder, anyhow?
And, yeah, I AM GETTING FURIOUS!!!!!
Meanwhile, State Street's stock price briefly plunged by more than half at one point yesterday as investors acted on fears the financial giant, which provides investment vehicles to the money market industry, would suffer losses if money market funds continue to hemorrhage. The company said it did not expect such actions to hurt its finances, and added it had sufficient funds to weather the turmoil.
I am SO FUCKING SICK of BUSINESS LIES and PROPAGANDA!!!!
Been hearing the same old SHOP WORN LIES for YEARS NOW!!!!!!!!!!
State Street's stock rebounded later in the day, closing down around 9 percent, as the stock market rallied on reports that the Bush administration and the Federal Reserve were embracing a plan that would give the government the power to buy the troubled assets of financial firms.
So the markets rallied around SOCIALISM, huh?
Yeah, another FUCJING FRAUD about America we were sold!!!!
Such a move would allow those companies to recover from the losses they have sustained and begin to loan money again, reviving an economy that has been stricken by the credit crisis.
Why would they be loaning money?
They have GOBBLED UP all the BILLIONS in BAILOUTS, so WTF???
The Dow Jones industrial average ended a wild day of trading up 410.03 points yesterday, closing at 11,019.69. But the money market industry remained under stress. Yesterday, the Bank of New York Mellon's Institutional Cash Reserves fund became the fifth money-market like fund to "break the buck" this week, meaning investors' deposits are worth less than full value, according to published reports. The stories said the account, which the company offers to certain clients only, had a net asset value was 99.1 cents a share. A company spokesman declined to comment.
"It's what private pilots describe: Flying is 99 percent boredom and 1 percent holy terror - and we're in the holy terror" part, said Allen Sinai, global economist for Decision Economics in New York. "Some money markets that used to be safe aren't safe anymore," he said.
That crash you just heard?
The U.S. financial system.
Earlier this week, Reserve Management Co. in New York became the first fund manager in more than a decade to reduce the share value of a money market fund below $1. Yesterday the company closed 23 funds to new purchases and may take up to seven days to return money to investors who request it.
But that is MY MONEY and I WANT IT NOW!!!!!!
Since when does someone looking after YOUR MONEY say YOU CAN'T HAVE IT!
That guy gets decked in the real world!!!!
Numerous other investment firms, including Dreyfus, Evergreen Investments, and the Columbia investment unit of Bank of America, have either injected funds or took other steps to prevent losses in their money market funds.
Translation: This economy is collapsing like a WTC tower!!!
Putnam was the only investment firm to close a money market fund yesterday. The closure was the best way to protect its shareholders, Reynolds said; otherwise Putnam would have been forced to quickly sell the fund's securities to repay investors - a move that could have resulted in losses for Putnam and fund shareholders.
Yeah, FUCK YOU, Americans.
Who gives a shit if they lose YOUR MONEY -- as long as THEY are PROFITABLE!!!!
Yup, I FUCKING HATE WALL STREET NOW and it should be BURNED to the GROUND!!!!!!!!!!
At the time of its closing, Putnam said the fund's value had not dropped below the sacred $1-a-share level. The withdrawals came despite the fund not owning any Lehman securities.
That can't be good!
Panic withdrawals by investors in a down market can add to the financial stress of the companies that manage them.
Just trying to do my part!
If they are forced to sell fund holdings at low prices, the fund managers may be required to spend more of their own money to make the funds whole.
"It's this weird dynamic where they're forced to sell, and the more they sell they less they get," said Neil Bathon, managing director of PMR Associates, a Boston research firm for asset managers.
Oh, you mean they have to put up with what the rest of us do?
Oh, boo-hoo-hoo for the looters of Wall Street!
Jeff Glenzer, managing director of the Association for Financial Professionals, said corporate treasurers are trying to ensure full access to their cash so they pay their employees and complete mergers and transactions.
"A couple years ago when things were booming, cash was viewed as a drag on earnings. Now it's considered pure gold, because liquidity is a concern of every company in America," he said.
State Street's problems stemmed from concerns about four financial investment products known as "conduits" it sells to money market funds. The conduits together have a value of $1.6 billion, and analysts said investors apparently grew spooked that State Street might have to absorb losses related to those securities.
Do I need even say it?
Its stock, which opened at $66.08 a share, fell as low as $29.09 yesterday, before it recovered, closing at $59. The company said it would not have to account for the value of conduits, which would have reduced its capital standing. State Street also said it has sufficient reserves, noting that it had raised $2.8 billion in equity capital in June, and that it has no current plans to raise more.
Oh, so everything is fine, huh?
PFFFFFTTT!!!
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