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Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote

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Wed, 01/27/2010 - 13:11 | 207750 Anonymous
Anonymous's picture


Thu, 04/07/2011 - 05:50 | 1144505 george22
george22's picture

Great post! I?m just starting out in community management/marketing media and trying to learn how to do it well - resources like this article are incredibly helpful. GoSeeq

Thu, 04/07/2011 - 05:53 | 1144507 george22
george22's picture

Great post! I?m just starting out in community management/marketing media and trying to learn how to do it well - resources like this article are incredibly helpful. GoSeeq

Wed, 01/27/2010 - 13:11 | 207751 Anonymous
Anonymous's picture

what do the big boys like Vanguard, Fidelity, etc have to say about this?

Wed, 01/27/2010 - 14:50 | 208002 Anonymous
Anonymous's picture

We have nothing to say. We can't do anything anyway. We must follow the SEC mandates. Nothing to see here, move along. Z

Wed, 01/27/2010 - 13:12 | 207753 Anonymous
Anonymous's picture

This is why t-bills have negative yields. According to the new rules money market funds can only invest five percent of their assets in second tier securities. That means portfolios have to be rebalanced with 95% AAA assets which means the only thing they can really buy is Treasurys.

Wed, 01/27/2010 - 15:13 | 208052 Anonymous
Anonymous's picture

5% is not new and AAA has no bearing on money market funds. It is the short-term rating, A1 from S&P, P1 from Moodys that is considered in the funds make-up. A money market fund has been able to hold up to 5% of second-tier paper (A2/P2) and still be considered a top-tier fund.

Wed, 01/27/2010 - 15:21 | 208078 Anonymous
Anonymous's picture

Is this coming soon?


The fools will instigate a hoarding spree.

Wed, 01/27/2010 - 17:21 | 208267 ATG
ATG's picture

Since there are less than a trillion dollars in

Federal Reserve Note physicals available,

versus trillions in virtual Gold and Silver ETFs

and exchange derivatives, mattress money may

rule as prices go back to the 1930s. Wait until

they turn off internet banking and brokers...


Wed, 01/27/2010 - 13:14 | 207758 SV
SV's picture

Just took down a 401K not too long ago.  Didn't take a genius to see the writing on this wall was coming.  Exits are getting blocked people... 

Wed, 01/27/2010 - 13:29 | 207797 Anonymous
Anonymous's picture

the fascist state is alive and well....germany
1933 has embodied america in the 4th reich....

Wed, 01/27/2010 - 13:55 | 207859 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Pattern? what pattern?!? Nope, don't see any patterns developing here. Hmm.

Wed, 01/27/2010 - 13:56 | 207861 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Pattern? what pattern?!? Nope, don't see any patterns developing here. Hmm.

Wed, 01/27/2010 - 17:23 | 208273 ATG
ATG's picture

Mandatory Pension conversions to annuities

buying only Munis and Treasuries?

Ammo food sales off the chart first...


Wed, 01/27/2010 - 13:16 | 207765 Anonymous
Anonymous's picture

Can anyone recommend an online trading account that doesn't park cash in a money market?

Wed, 01/27/2010 - 13:51 | 207855 naiverealist
naiverealist's picture

I have accounts at TD Waterhouse in which I have specifically directed them to hold my cash as cash and not "sweep" it daily into their money market account.  I presume that most dealers have the same option, but don't know, as I have been happy with my broker.


This does not constitute a reccomendation, only a depiction of my actions.

Wed, 01/27/2010 - 15:35 | 208108 gookempucky
gookempucky's picture

Ditto'd that last year -also with TD--mucho grateful ZH.

Wed, 01/27/2010 - 15:44 | 208124 peterpeter
peterpeter's picture

And what protection do you have against TD going up in smoke?  If you're worrying about gates closing on money market funds (something that has happened so far only once that I know of), it would seem to me that you'd also try to evaluate the risk of a bank failure...

SIPC coverage is laughable, since they would become insolvent in the event of a failure as large as TD - and it only covers the first $100K in cash.... so you'd be better off IMO linking your TD account with an FDIC insured bank and parking your excess funds in a checking account.

Another option to consider would be to buy ETFs holding short term govt paper, like BIL.


Wed, 01/27/2010 - 18:31 | 208378 Anonymous
Anonymous's picture

ditto'd ditto'd with TD, i can't find any info if
TD Bank USA, N.A. received any TARP!

Wed, 01/27/2010 - 16:52 | 208226 Anonymous
Anonymous's picture

I recently noticed that Schwab no longer sweeps my cash to an MM fund. It just goes into a category labelled "margin cash".

Wed, 01/27/2010 - 17:24 | 208276 ATG
ATG's picture


Wed, 01/27/2010 - 22:02 | 208556 Anonymous
Anonymous's picture

Scottrade offers a bank deposit program as a sweep vehicle. My understanding is that many discounts utilize a similiar product. FDIC coverage up to 2.5 million because they spread your deposits over several participating banks.

Wed, 01/27/2010 - 13:17 | 207767 Dr Horace Manure
Dr Horace Manure's picture

Now where do we run to?  No more MMMFs for me.  Let the run on MMMFs begin NOW.

Wed, 01/27/2010 - 13:17 | 207769 tenaciousj
tenaciousj's picture

Usually a sure fire way to create a run on certain funds, is to spook people into believing they no longer have control over said funds.

Wed, 01/27/2010 - 13:22 | 207778 Anonymous
Anonymous's picture

Exactly. Whatever paltry amount of cash I have in my Schwab MMF is now coming out immediately. How dumb are these people? I guess they're just assuming most aren't paying attention.

Wed, 01/27/2010 - 13:22 | 207776 SmalleyD
SmalleyD's picture

I'm screwed. My 401k doesn't permit rollovers as long as you're still employed with the company. And what is one's choices after that, but to move it to a qualified IRA anyway.

Wed, 01/27/2010 - 13:28 | 207794 Anonymous
Anonymous's picture

I believe I read on Mish's Economic blog a commentary
where the person quit his job so he could
withdraw his 401k.

Wed, 01/27/2010 - 15:52 | 208135 Anonymous
Anonymous's picture

Maybe companies should start offering three day dismissals and rehirings as part of their 401K package.

Wed, 01/27/2010 - 14:32 | 207956 Anonymous
Anonymous's picture

you know you can hold precious metals in an IRA, right?

Wed, 01/27/2010 - 17:26 | 208280 ATG
ATG's picture

A good way to lose money with deflation...


Thu, 01/28/2010 - 18:12 | 210028 Anonymous
Anonymous's picture

Deflation? Ha! Inflation is coming dude - it's the only way they can take down these debts. Hell, it's already here in the food prices.

Wed, 01/27/2010 - 15:01 | 208027 chet
chet's picture

A good IRA should offer you much more choice than your 401k.  Many 401k's are a total rip with horrible fees and very few choices, and if it weren't for the match I'm getting, I wouldn't participate.

I'm in your boat.  401k is tied down as long as I'm employed.

Wed, 01/27/2010 - 17:17 | 208262 RatherBFlying
RatherBFlying's picture

Check out the loan provisions. Max out the loan amount now.


What to do with it when you get it in your hand? Well, after this ruling, I don't know. Looking for suggestions.

Wed, 01/27/2010 - 13:22 | 207779 Gimp
Gimp's picture

After Captialism comes Fascisim. It will slowly creep into our lives until one day you will wake up and be under complete control. Ach Tung Baby!

Wed, 01/27/2010 - 13:24 | 207782 trav7777
trav7777's picture

JFC, they are really starting to lock the exits.

Devaluation coming?

Next rule:  SEC can suspend withdrawl from your checking or savings account.

Wed, 01/27/2010 - 13:33 | 207806 deadhead
deadhead's picture

actually, as I recall, banks have an enormous amount of leeway to saying no to withdrawals.  i don't remember all the details as it has been a long time since my banking days but banks do have that power to say no.

Wed, 01/27/2010 - 17:29 | 208282 ATG
ATG's picture


Wed, 01/27/2010 - 17:28 | 208283 ATG
ATG's picture

Courts ruled deposits do not belong to

depositors, but the bank or broker...

Wed, 01/27/2010 - 18:44 | 208396 Anonymous
Anonymous's picture

most internet banking, everbank, hsbc, countrywide a year ago were offering some interest rate incentives and would put in a couple of hundred thousand, but they had strict increment limits taking out daily, weekly, monthly. banks just suck. you can put it in a second but you can't take it out. actually dealing in cash was the biggest awful awakening, dirty worthless paper your trying to hide or keep safe. when you stack it is huge cause america only has $100.00 bills. try taking it back in the system, that is a wake up call. sit for hours while they have to count it by hand three times with a witness.

Thu, 01/28/2010 - 18:49 | 210109 Anonymous
Anonymous's picture

I wish I had your problems.

Wed, 01/27/2010 - 13:43 | 207833 Rusty_Shackleford
Rusty_Shackleford's picture

This is an important point.  People think of checking and savings accounts as "their money".


It is not "your money".  "Your money" was loaned to the bank when you "deposited" it, and the dollar amounts on your accounts is what the bank "owes" you.


If you've got money in the bank, it is not yours.  It is just what the bank has agreed to pay you back - if it can.

It's as simple as this "Can't pay - Won't pay".


Wed, 01/27/2010 - 14:10 | 207901 WaterWings
WaterWings's picture

In the same vein if you stop paying property taxes the government will take back your land. It never really was yours in the first place.

Wed, 01/27/2010 - 13:25 | 207783 bugs_
bugs_'s picture

Another foreshock.  Get ready.

Wed, 01/27/2010 - 14:02 | 207885 Brindle702
Brindle702's picture


Wed, 01/27/2010 - 13:25 | 207785 Anonymous
Anonymous's picture

This is classic frogs in the pot... before most people realize what's happening it'll be too late.

Wed, 01/27/2010 - 13:26 | 207787 Anonymous
Anonymous's picture

I withdrew on of my IRA's Jan 4,2010 thanks to the heads up by ZH!

Buckle up for some ugly times on the way!

Wed, 01/27/2010 - 13:28 | 207795 Anonymous
Anonymous's picture

Everybody who has parked their 401K's in MM$ now
are watching their funds transform into a pile of
leaves....only waiting for the perfect storm to ignite
them into ashes.

Wed, 01/27/2010 - 13:31 | 207799 Anonymous
Anonymous's picture

So let me get this straight - I own a stock, I decide to sell it because it is tanking, the remaining funds automatically go into my money market account - and then I can't get the money to put into a safe place like my safe when I think we are getting close to tyranny?

Wed, 01/27/2010 - 13:44 | 207836 Rusty_Shackleford
Rusty_Shackleford's picture


Wed, 01/27/2010 - 14:33 | 207958 cougar_w
cougar_w's picture

Yes. And so equities start looking like a safer place to store money than MMF.

So back you go.


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