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Gross Says Hold Cash, Prepare For "Nightmare Panic Selling"
Ever since bond market liquidty became the topic du jour across Wall Street (just a few short years after it was first raised in these pages), analysts, pundits, and reporters alike have begun to question what might happen should investors who have piled into mutual funds and ETFs (especially fixed income products) suddenly decide to sell into illiquid secondary markets.
Some have suggested, for instance, that if corporate bond fund managers were suddenly inundated with a cascade of redemptions, the absence of dealer liquidity in the secondary market could create the conditions for a firesale.
The problem, as we’ve been keen to point out, is that when fund flows are one-way (i.e. everyone is selling), fund managers must either i) meet redemptions with cash, or ii) trade the underlying securities. Note that the latter option is so undesirable in illiquid markets (indeed, trading large blocks into illiquid markets poses a systemic risk), that some fund managers are now lining up emergency liquidity lines with banks so that they can at least meet an initial wave of selling with cash and avoid, for a time at least, sparring with illiquidity.
In his latest Investment Outlook, Bill Gross addresses the above, describes what events might trigger a retail exodus (thus tipping the first domino), and says investors should hold enough cash to ride out the storm without participating in a firesale caused by rising rates or some manner of exogenous shock.
* * *
From “It Never Rains In California”:
Mutual funds, hedge funds, and ETFs, are part of the “shadow banking system” where these modern “banks” are not required to maintain reserves or even emergency levels of cash. Since they in effect now are the market, a rush for liquidity on the part of the investing public, whether they be individuals in 401Ks or institutional pension funds and insurance companies, would find the “market” selling to itself with the Federal Reserve severely limited in its ability to provide assistance.
While Dodd Frank legislation has made actual banks less risky, their risks have really just been transferred to somewhere else in the system. With trading turnover having declined by 35% in the investment grade bond market as shown in Exhibit 1, and 55% in the High Yield market since 2005, financial regulators have ample cause to wonder if the phrase “run on the bank” could apply to modern day investment structures that are lightly regulated and less liquid than traditional banks. Thus, current discussions involving “SIFI” designation – “Strategically Important Financial Institutions” are being hotly contested by those that may be just that. Not “too big to fail” but “too important to neglect” could be the market’s future mantra.
Aside from the obvious drop in trading volumes shown above, the obvious risk – perhaps better labeled the “liquidity illusion” – is that all investors cannot fit through a narrow exit at the same time. But shadow banking structures – unlike cash securities – require counterparty relationships that require more and more margin if prices should decline. That is why PIMCO’s safe haven claim of their use of derivatives is so counterintuitive. While private equity and hedge funds have built-in “gates” to prevent an overnight exit, mutual funds and ETFs do not. That an ETF can satisfy redemption with underlying bonds or shares, only raises the nightmare possibility of a disillusioned and uninformed public throwing in the towel once again after they receive thousands of individual odd lot pieces under such circumstances. But even in milder “left tail scenarios” it is price that makes the difference to mutual fund and ETF holders alike, and when liquidity is scarce, prices usually go downnot up, given a Minsky moment. Long used to the inevitability of capital gains, investors and markets have not been tested during a stretch of time when prices go down and policymakers’ hands are tied to perform their historical function of buyer of last resort. It’s then that liquidity will be tested.
And what might precipitate such a “run on the shadow banks”?
- A central bank mistake leading to lower bond prices and a stronger dollar.
- Greece, and if so, the inevitable aftermath of default/restructuring leading to additional concerns for Eurozone peripherals.
- China - “a riddle wrapped in a mystery, inside an enigma”. It is the “mystery meat” of economic sandwiches - you never know what’s in there. Credit has expanded more rapidly in recent years than any major economy in history, a sure warning sign.
- Emerging market crisis - dollar denominated debt/overinvestment/commodity orientation - take your pick of potential culprits.
- Geopolitical risks - too numerous to mention and too sensitive to print.
- A butterfly’s wing - chaos theory suggests that a small change in “non-linear systems” could result in large changes elsewhere. Call this kooky, but in a levered financial system, small changes can upset the status quo. Keep that butterfly net handy.
Should that moment occur, a cold rather than a hot shower may be an investor’s reward and the view will be something less that “gorgeous”. So what to do? Hold an appropriate amount of cash so that panic selling for you is off the table.
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“Hold Cash”
Worked for MF Global’s clients. Wait...wut?
They weren't holdng cash... they were letting someone else hold their cash.
Personally I'm not sure whether cash should be legal. On the one hand, I empathize with those who prefer to use cash for the sake of tradition. However cash allows money launderers and criminals to do business completely undetected by law enforcement. For this reason, I think a total ban on cash wouldn't be that unreasonable, especially now that electronic payments are almost universally available.
You're not sure! C'mon, be sure! Say it should be illegal! You'll get moar junks!
:)
Bill, that creepy feeling you have of something sneaking up behind you isn't a market crash. It's death.
Bill has always been the Fed's planned opposition.
First of all, where is the ignore feature on this site?
When someone like Gross says "hold cash", you need to understand how he defines the critical words "hold" and "cash". Also, you need to understand he doesn't live in the same world we do. He probably has a higher AMEX bill this month than I have net worth.
It all goes back to what I learned early on when I first discovered this site. ABCD - anything Bernake can't destroy. Just replace "Bernake" with your evil doer de jour, be it Yellen, Putin, ECB, Greece, etc.
"They weren't holdng cash... they were letting someone else hold their cash."
Ha, yup -- let Janis hold your cash, or just drive around with it all in your trunk. No risk there....
I just pulled $150k out of my credit union, in cash. You should have seen the orgy it took to get that money. I had to wait a week for them to order it from the Fed Reserve. When I picked it up, they asked me about 10 questions - all of them personal and related to the cash - where do I work, what do I do, what is my plan with the money. I refused to answer, answering only "refuse to disclose". The form that was being filled out, according to the teller, was going to the federal reserve bank, not the IRS or treasury.
Needless to say, with the recent DOJ memo recommending that tellers notify local police departments when customers withdraw more than $5k, I was a bit nervous. Especially given all the civil asset forefeitures: https://www.youtube.com/watch?v=3kEpZWGgJks where police departments legaly steal your money.
I had several dash cameras running, and a retired police detective with me - just in case.
As they were counting the cash, I had a discussion with the teller. It is scary, sad, and outright depressing how clueless people are about the state of affairs.
I love your profile picture, kudos. Seems as though I waited to long to pick mine up, no more anywhere to be purchased.
http://dixieoutfitters.com/pages/
Y’know..
I am all that well studied in the forces of what is supposed to be the market..
..and bonds and yields and stuff is pretty confusing..
But whatever happens..
Drew Carey and "The Price Is Right" will still be on one of the lower broadcast channels.
http://cluborlov.blogspot.com/2015/06/the-care-and-feeding-of-financial-...
Stopped reading the link at the point where it claimed Dominique Strauss Kahn was falsely accused of rape.
No credibility beyond that. DSK was/is a walking pile of shit. Being a Jew, he has evaded the consequences of his actions since going back to when he was finance minister of France. He was caught embezzling students insurance funds. Got a sweetheart deal rather than prison time.
He has been accused of sexual impropriety so much that he should have zero credibility as far as other victims make claims.
DSK is a shining example of how the chosen "get away with it". There are those who feel for him because his bid for the presidency of France went out the window but that was a very minor consequence compared to what any of the Goyim would have faced.
you're right & wrong.
dsk is vile, but he didn't rape that immigrant nigger. those 'maids' in 'that' type hotel are, effectively, full-time whores and part-time linen changers.
he propped her, paid her, bent her over and then made his way to jfk...then the fun began. agents were in the hotel's basement coordinating the whole thing, from his exit at the lobby to his arrival at the airport. that 'maid' wasn't going to report a thing...she was coerced, and played the game.
dsk was recently rewarded for tight-lips with a tidy lil acquittal.
what is 'aggravated' pimping, anyway? i didn't know there was another form.
janus
@Million
Phil Mikkleson doesn't agree with you
"However cash allows money launderers and criminals to do business completely undetected by law enforcement."
So do cell phones and cars and the internet. Should we ban those too?
Hey, if it will cure world hunger then why not
I never looked into what happened in New York too closely. DSK has zero credibility and the allegations that he was about to undermine the IMF or reveal gold secrets are nonsense. He would not act against those who provide him with wealth and power.
I suspected that New York was just another episode where he was caught and would skate away from.
If he was innocent it would certainly be a first for him and his ilk.
dsk's troubles had nothing to do with any impedning revelations. he was playing footsie with the wrong people. he was getting too big for his britches and got the smack-down.
as to whether or not he would've revealed secrets after his take-down -- absolutely. but he made his deals, took his medicine and is likely at this very moment engaged in some exotic perversion or the other.
let me ask you this: do you think madoff is 'actually' in prison? i suppose, if you call 'tahiti' prison, then, sure...madoff is doing some very 'hard' time right now.
any of you 'journalists' doubt janus? well, why don't you call the appropriate federal facility and see if you can schedule an interview in the very near.
amoricans are the most gullible and credulous lot on the whole fuckin planet.
janus
Madoff lost his funds money the old fashioned way.....through greed and stupidity. The Ponzi scheme was a cover story that would insure his investors (who were largely Jewish) received compensation from a government fund set up to help those victimized by fraud.
I don't know where he is in prison, if at all however; I do know most of his personal wealth is safe in Israel.
DSK was the anointed front runner for the French Presidency. He would have had it without any question (the French are not bothered by little issues like sexual peccadillos of virtually any variety, although admittedly, they are more feminist than they used to be). He clearly pissed off somebody very, very, powerful, more than likely by his economic policy stance. He was a closet economic conservative, despite his Socialist Party membership and prominence. So instead of a guy who would have been, despite his "hobbies," a rather rock solid candidate and likely President as well, France got a free for all--first with a bunch of Socialist women battling it out, and then the Humpty Dumpty perennial loser-boy, Hollande, who had never held any significant office aside from that of Socialist Party President, dumped his long-term GF and mother of his kids, Segolene Royal, who was the front-runner, and voila! We have a loser president in France!
bet y0u all my monkeys FNF gets presidency after SHTF.
Don't be surprised if you are contacted by some government agency to follow up on some discrepancies. Namely your right to not disclose. You likely would've been better off answering along the lines that you were "sponsoring" a family of illegal Mexican midgets to come and live with you. At the point you said "illegal" and "Mexican", you would've been stroked off their government targeting list.
if you are sufficiently old..
and at peace with the Almghty
it does not matter.
..or you were planning to donate to a "certain presidential library".
… sorry to butt in here, but
Bill Gross is getting to look WAY too much like Edgar Allan Poe !
Don't be surprised if you are contacted by some government agency to follow up on some discrepancies. Namely your right to not disclose. You likely would've been better off answering along the lines that you were "sponsoring" a family of illegal Mexican midgets to come and live with you. At the point you said "illegal" and "Mexican", you would've been stroked off their government targeting list.
Find a place to hide it when Jade Helm comes to town. Unless the cops beat them to it.
"I see now, when it is too late what we are up against"
I just pulled $150k out of my credit union, in cash.
The FBI should be calling you soon. Then they will claim you lied to them about the cash, and indict you for a felony.
Believe it or not, seeing what happened to Hastert motivated me to make additional large cash withdrawals. If they come knocking, my answer will be the same as it is to all law enforcement - I don't talk to government. Come with a warrant (indicating probable cause that I did something illegal), or pound sand.
For a small fee, I could find a 'witness' who remebers buying drugs at your house, or was it the house down the street. Oh well, I'm sure they raid both houses. Good Luck.
If the claim is that they bought it at my house, that would be a mistake. I have 30+ HD cameras in and around my home that have been recording for over 2 years - with every moment archived off site. They'd literally be picking on the wrong house.
And the SWAT team will find all that out after they raid the place. I'm sure your cash wont get 'lost' during the 'Let's figure this shit out' phase.
BTW I didn't junk you.
Serious question based on your obvious dislike of the government:
What are all the cameras for?
To introduce evidence in a lawsuit someday in a government sponsored courtroom?
Or for personal use?
How the heck do you watch/sift through 2+ years of footage?
I don’t trust the government either, but 30+ cameras seems like a fetish.
Probably more OCD than fettish. It started with one camera to watch my dogs and see which one was getting into the trashcan. From there, I wanted to see which one was getting on the couch, onto the counter, etc. Then our cars were broken into, so I added some to the front. Then I noticed all the blindspots and added more.
Admittedly, looking at it from the outside, one could easily argue that I've got issues. But, that being said, I've caught several kids on video breaking into cars on the street (sending one to jail) The neighbors all come to me when something goes awry (or missing). You would be surprised to see what happens during the day when you're not home.
As far as sifting through the contents, I never do. Only if something out of place do I go back and look. I also have two new kids, so archiving everything seems only logical. The cameras only record if there is motion (or if they're triggered via external sensors). So, combined, I amass about 3TB of data per month. With the price of 5TB drives around $120, it's not expensive to just keep adding more.
So, the cameras now, 'officially' are to protect my assets - home, vehicles, and contents within both. I really don't foresee using it for any litigation purposes.
My friend.
I decided NOT to move to USA because i wanted to protect my assets.
GEt that 150k invested in plan b .
Ok here we go. In the americas...
Chiloe, Chile (very very preper shit hole , survival almost garanteed)
Villa langostura , Argentina . (if you like meat, lamb, trout fishing, hot chicks ?)
Cordoba, Argentina ( insanly hot women)
-------- (close to vancouver) ain't saying , Canada . Or did Fuckyou shima fry that yet?
Tulum , Mexico . ( food, beaches , international runaways)
St Barth, France ( if you are loaded , move there now , take coke with the local " impot " guy , fuck his wife next day when he passes out.) (Impot means taxes for you boludos.)
Freeport , Bahamas. They want YOU! (No property taxes, great shark dives ;)
PUNTA DEL ESTE , URUGUAY . Fuck rich posh or hippy preper paradise. You have literally 100's of American buying land , building artificial lakes , and flipping self sufficient farms, or planting weed . wee.
Fernando de Noronha , Brasil (if you have Cancer and will die soon go there)
good luck
you seem like someone worth knowing.
see ya at the bar down fernando de nahrona-ways...brasilians look at me crazy when i say i love samba -- but i have great memories attached to that beer.
https://www.youtube.com/watch?v=df1E4NJu7ng
janus
30 cameras? Either you are a porno producer or you have a very large house :).
You did the right thing by taking your money out. Anyone with cash int he bank other than to pay immediate expenses at this time is a complete fool. Learn from Greece. Don't get caught with the herd.
And if you think the FDIC has you covered, you are very ignorant about how much money the government is able to cover in the event of a collapse.
I have no sympathy at all to those who keep large sums of money in the banks. I have warned my friends and family and have been largely ignored. People would rather live in denial. Seems to be human nature for the majority of folks. When you leave your money in the bank, you are making yourself a willing victim. You have a choice!
Cash alone will not protect those from the next collapse; Only in the short term. In order to be truly prepared, you have to be able to live a sustainable lifestyle, have a means to defend yourself, have a form of money that contains a REAL store of value (precious metals), and most of all, have community. If you do not have these these things, you will be in for a hard time (and 99% of the US population doesn't),
The more people that we can convince to prepare for what is coming, the less people we'll have to defend against. The most dangerous man is one who has nothing left to lose.
And in the even that the US uses the Bush doctrine to start a pre-emptive nuclear war, none of the above matters. We are all pretty much screwed if that happens. And yes, that could happen.
J
I have an uncle, a senior citizen. Nice old guy. Very frendly and trusting, but he dosen't trust the government or the banks. He decided to take all of his money, his life savings, out the bank and hide it at home. Now once a week he helps out at the local homeless shelter. He was telling everyone there what he had done. That night he got a visit. They tied him up and took all his savings. They spent most of it before they were caught. Word to the wise.
Lesson is KEEP YOUR MOUTH SHUT! Dumbass.....
If others are not smart enough to do to take their money out of the bank then let them die.
AND DONT POST ANYTHING ON THE INTERNET EITHER!
Seriously...bitcoin is the SCAM of the century...hard to call it illegal of course but folks need to look at the of the "bit" in the Bitcoin.
Those things can be produced "out of thin air" for next to nothing.
Paying for or five hundred dollars for that "bit" is quite a premium.
The Federal Government still "inks" cotton and linen so I would stick to that.
Paper in fact is quite expensive right now....just ask Venezuela...
Yep, we are at that point.
Wasn't that part of the movie Disclosure? Back in the 80s? Where the CC camera footage was digitally altered?
We now know why all Russian cars have dashcams. Because otherwise the governments footage will show exactly what the government expects it to show.
For fecks sake, it was 'Rising Sun' by Crichton, that had the digitally altered closed circuit camera tapes.
Disclosure had Demi Moore 'harassing' that poor man, Michael Douglas.
why not use the response of starting an all cash business or investing in a startup?
When I pulled $1k in nickels, my reason was a vending machine business. I did not think "for smelting purposes" would have been a good response.
The funny thing is most people will cry, "We didn't see it coming" when the SHTF, just like with those buying overpriced bubble houses who want bailouts over and over again.
Great story, been there too......the banks are like a venus flytrap plant, if youj know what I mean. BofA and Chase both make large withdrawals difficult. Of course if you read the contract governing deposits it becomes clear that......it is really not your money anymore, once deposited
Down with the Banks
Down with inherently fraudulent balance sheet accounting.
Down with the institutions that support the banks:
CONgress,
the not so Supreme Court (according to the US Constitution), ((no, they are not the "Supremes"))
the totally bought, paid for, and conpletely corrupt Executive Branch and...All Alphabet agencies operating under the executive branch
All Police, whether local or Federal.
The entire US media and most of the culture
erkme 73, your cash has a LARGE rfid signiture. ! wrap it in lead. And in traveling in lesser amounts, again, lead.
yes, do send all cash to janus for safe-keeping -- c.o. ZH, the interwebs.
any fool stupid enough to hold t-notes after both mohammed el erian & BG left pimco post-haste and with precipitous dispatch deserves what's commin to them.
btw, BG...heard about yer fete on the 33rd floor at state-street. congrats on the move to janus; actually, congrats to janus on the best acquisition in its storied history.
let the games begin, bitchez!
looking back, it's rather amusing. BG was steadfastly and honestly telegraphing the future with cutesy lil allegories about kitty cats and butterflies, telling the world in the gentlest way possible that a reckoning is a-commin. he was mocked by his own board and top-tier investors. scorned for truth-telling. and ridiculed here on the Hedge.
and now the reckoning seems to have arrived. and janus couldn't be happier.
i can't help but wonder why warren buffett didn't advise the people on the inedibility of t-notes.
gold, it's what's for dinner.
janus
Gold? It gives one that heavy, full-feeling. A can of soup is worth more than a coin of gold. Tastes great; less filling.
Few people understand that concept.
Possession of gold was and will again be illegal and confiscated
Moonshine, guns, ammo, medicines, food and anything providing basic survival needs will be currency again.
you're forgetting the most important element, Headbanger -- people. without a network of people you can trust -- people who are competent, resourceful, fierce, loyal & productive -- your supplies will be confiscated just as easily as gold.
and, rainbow-worlders, please do keep janus updated on the 'progress' in your polyglot utopia...i would pay anything to see the looks on your faces when all your bleeding-heart agitating & activism gets its jaw cracked by some 'victims' of 'white-privlidge'.
Hedgers, i'd start stockpiling people of integrity & honor...all the rest will take care of itself.
janus
Well put.... Holding specie and supplies is important. Having a network of like minded trustworthy and skilled people is vital. Having a skill that you can bring to the table is more important that the silver coins in your pocket.
Best thing I can recommend is start getting to know your neighbours. You may come across as a kook but still get them to think leading to cognitive dissonance if you point out some of the more blatant contradictions.
We often hear of folks dismissing us because they are TV educated but ignore those who have successfully opened the eyes of their peers. I forget where I heard this but... In the past it was like crossing a grand canyon to bring someone over to our side. Now it is like skipping across a dried creek bed.
People are waking up and now is the time to point them in the right direction. Create some cognitive dissonance. You will be surprised at the positive responses. Move on quickly from those who are emotionally invested in the status quo.
Maybe start with the JFK assassination. Then pry into 9/11. The Iraq War. War on Terror. The MIC. Point out how things that 'seemed crazy' 15 years ago, are now true. And that the people who WARNED EVERYONE were labelled crazy, paranoid, etc.
JFK to 9/11: Everything's a rich mans trick - Must watch and spread
https://www.youtube.com/watch?v=U1Qt6a-vaNM
My favourite eye opener is the dancing Jews on 911. It clearly illustrates that 911 was both an inside job as well as Israeli involvement. Links to mainstream reporting of the dancing Jews can be easily found to aid in making the point.
amen.
i will only add that some of the 'kooks' i've known are the very best of people to know in such circumstances. anybody that's not a lil different is to janus abberant and abnormal. i detest 'normality'...nomrs are boring and dim-witted.
janus
I'll take J Anus for 2000 Alex.
That sounds all well and good until the "Hear something, say something" campaign by the government begins and one or several of your neighbors turns you in for being "negative and subversive."
I prefer the old slogan, "loose lips sink ships."
My solution: Store plenty of supplies, encourage family members to become avid sport shooters and hunters, then when the SHTF, call them all over and tell them to bring all their rifles and ammo.
The old fashioned "Family Mafia" can't be beat, especially if you're feeding their kids.
Good point. As far as I'm aware, silver didn't get confiscated during the Depression but gold obviously did. The word Silver is also literally synonymous with money in over 15 languages. Sounds like a no brainer over gold .
Good point. As far as I'm aware, silver didn't get confiscated during the Depression but gold obviously did. The word Silver is also literally synonymous with money in over 15 languages. Sounds like a no brainer over gold .
Possession of gold was and will again be illegal and confiscated
Moonshine, guns, ammo, medicines, food and anything providing basic survival needs will be currency again.
Ever hear about the Black Market?
Need some Cocaine? How about Meth? Want some Pot? I know...Heroin is more your style. Or maybe some Oxycontins and some Xanax.
Those are just too damned easy to get.
In fact I was interrupted while writing this post.
The homeless woman who sells me Gold Bearing Electronics had an Eigth of quality Marijuana...for sale. I declined as I do not use.
I do not even have to go anywhere. It is far too often brought to me, as people mistake me for a user as I wear my hair long in protest of the Wars.
How is that War on Drugs working out?
There are many more Drugs available today on any street corner than there were 40 years ago.
Prices have even DECLINED for some Drugs due to overabundance.
Yeah. Let them illegalize Gold. The price will only increase.
Give that man a cigar, he understands the world and human nature.
Don't matter what they make illegal, someone will be selling it.
Yeah, currency cuz' none of that has ever been illegal or can be made illegal, oh wait... Never mind...
I am not sure they will outright make gold possession illegal. It would drive the whole trade underground as it becomes the preferred means of settlement for larger transactions. Aside from the lost tax revenue, gold is held by a large number of establishment types.
They will get gold out of private hands through revaluation. By setting the price in fiat very high, new buyers will become very scarce and most holders will sell to cash in. Central banks will get gold for freshly printed script. That will also allow the central banks to get the gold in jewellery, dental material and art objects (rare coins) without appearing draconian.
Entice people to sell voluntarily and you will get far more gold than trying to seize it. The IMF already has a plan in place to thwart a widespread public move into specie. It involves a revaluation. No link as I learned of this from a client whose relative is a deputy director of a Scandinavian central bank.
I'm guessing a safe or secure depository would work better than my trunk. Even a safety deposit box...
Are you kidding about a safety deposit box? Those boxes are not immune from government access. Better off losing the items in a boating accident somewhere. Shawshank Redemption
Exactly.
Notice that all those Greek Banks won't let anyone in to get a 'safety' deposit box.
Really, it's an oxymoron like 'jumbo shrimp'.
Get a good safe and mount it in concrete somewhere you can access it even if all the banks are closed.
So the Fed will let him know the date of the panic selling. But Bill is too big to get out of the way.
Anyone care to hazard a comment as to whether this extends to very short duration "money market" type funds? Those broke the buck in the last big crash, but it didn't pan out to a long term loss.
Regards,
Cooter
https://www.youtube.com/watch?feature=player_detailpage&v=9NaQZojWi6U
New SEC Money Market Reform Rules:
Liquidity Fees – Under the rules, if a money market fund’s level of “weekly liquid assets” falls below 30 percent of its total assets (the regulatory minimum), the money market fund’s board would be allowed to impose a liquidity fee of up to two percent on all redemptions.
Redemption Gates – Under the rules, if a money market fund’s level of weekly liquid assets falls below 30 percent, a money market fund’s board could in its discretion temporarily suspend redemptions (gate). "...... A money market fund that imposes a gate would be required to lift that gate within 10 business days."
If bonds start having any real problems, that won't even slow the avalanche down....
But suppose one is not interested in redemptions, but is OK with just sitting in the money market fund? (Or am I missing something basic? I'm in the computer biz, not finance.)
Specifically, suppose I don't want to cash out my 401k and pay the tax + penalty, but would rather just leave it parked for the next 5-10 years. Is there anything 'safer' than an money market fund?
Treasury Direct.
Two things:
Floating NAV – Under the floating NAV amendments, institutional prime money market funds would be required to transact at a floating NAV, instead of at a $1.00 stable share price. For example your floating NAV in your money market fund might be $.9934 insead of now rounded $1.00 per share).
Most Money Market (Mutual) Funds are not FDIC insured.
and
The compliance date for the floating NAV amendments and fees and gates amendments would be two years after the date of publication of the release in the Federal Register. (Should be July 2016.)
My add and (I don't like giving Fin advice): With a .005 interest rate on MM savings, inflation at even 1%, the potential of floating NAV to drop below $1.00 your money setting there is dead/even decaying. Might want to think about a CD (401K rollover???) or two or three with different maturity dates. Like all things, adk questions, shop around and do your own homework investing or you'll have a bigger loss paying commissions/fees.
Hope it helps.
Some MM funds yes, some no. Research the different types of MM funds. For example, Bank Issued MM fuds are FDIC insured (for whatever that will be worth). Some MM funds might lose significant if not all value. It depends, too, upon where the MM invests--in what sector, etc. Not a simple answer but a suggestion to look it up yourself: your MM fund, Risks associated with different MM funds. Safe? It's ALL relative!
not really the issue of breaking the buck, more important, the surrounding events and market chaos that would be required to result in breaking the buck.
Definitely needs a new make up artist. He is scaring off investors in that pic.
"Personally I'm not sure whether cash should be legal"
dovetailing on the insight of MDB, personally I'm not sure whether individually owned property should be legal, either.
for one thing, property ownership immediately creates a division between the haves and the have-nots.
for another thing, people who own property sometimes mis-use it.
when property is owned in trust by the authorities, society benefits because the designated use of the property is vetted by those with experience and vision.
hugs,
the fraternal order of civil forfeiture
... when property is owned in trust by the authorities ... society often suffers because the property is misused for the personal gain of those authorities.
If I didn't know your methods, Safely,
I would think you were angling for the job of Bernie Sander's running mate.
Yabut, SG, I thought property was owned by our guvt. Isn't that why I get a huge fucking bill from them twice a year? Just for the pleasure of squatting on their property. And I'm sure I can be kicked off at any time, deed free and clear, notwithstanding.
"I'll take all of the above for 200 trillion in Bank impairments Alex...
A ban on cash would also let the Bankster Oligarchs take a percentage of every transaction on the planet. Since you're their stooge, I could see how you would support that.
Banks do all the laundering
I'm all for that as long as we also reduce the staff of all municipal and federal law enforcement agencies by 95%.
I like it!! But make sure that the remaining 5% are not the Sociopath, Genocidal Storm Troopers we see all the time killing and cracking skulls.
Ha.
The vision of those steroid addled beef-boys wearing their SWAT Tee's while diving the teeny meter maid carts tagging cars brings joy to my heart.
Electronic money can easily be stolen by the same ones who provide so called security(the gvt) and then back stopped by those same agents, thus creating an inflationary spiral of distrust and money, it's a stupid idea until you get the law and education straight , and right now it's, anything but straight.
The best form of money would be gold, silver and copper coins.
Which is, as I recall, how it was 100 years ago.
100 years ago as you recall. Henry, you must be on the list of historic relics?
How in the fuck can you 'recall' what happened 100 years ago?
Me: Who was the first president of the US?
You: I can't recall.
Me: What a maroon!
you're slacking MDB.
"...and remember, you can help no one else. Do not panic. Think only of yourself."
https://www.youtube.com/watch?v=LwRvWpsiM2w
MDB is ON A ROLL!!!!!
Yes MDB on a ROLL
Amazing.....................................................peeps miss it! LOL
The tradition bit................cracked me up!
MDB is like the Onion...on steroids!
Electronic payments work great until the power goes out.
And the power does go out.
Sometimes on purpose!
Everything that you utter, sounds like shit from a horn!
MDB I would have loved to see you weave in something about bringing back FDR's brain trust to help us with the big picture too.
Boy, good thing Bill Gross has our back because I'm not sure who else we can rely on.
how will you get your million dollar bonus if you start messing with the drug business?
MDB, There would arise a black market in 24 hours or less. Although those evil money launderers like HSBC will be thwarted (i'm sure) by having a ban on cash, people have an inherent desire to be free of the control of goverment central banks. Besides, how would the CIA make the drug sales they need so much to fund all the black ops? I mean there are a whole host of reaasons that the corrupt banking system and the secret families that own them need some kind of free POS transactions. The fractional reserve and usurious lending practices that central banks have used for centuries is simply never enough to fund their lifestyles. They always need MOAR!
for example: Buy TIDE with your food stamps (almost never on sale and doesn't go bad), and trade it for drugs. $20 worth of TIDE gets you a nickel bag, and the TIDE then sells on craigslist for $15 (edit: and soccer mom is happy she got such a deal on craiglist).
No cash allows money laundering and criminal banks to control all our money.
mdb, the zerohedge champion of sarcasm. rock on mdb
OMG! You have got to be trolling. Physical cash provides freedom which you are clearly against, the adults who lived through the great depression learned that lesson and the Greeks are learning it now. There is only one reason they want to ban cash and even though you have bought it hook line and sinker, it has nothing to do with money laundering, it has to do with imposing seriously negative rates to save the debt based monetary system.
MDB isn't trolling,,,he is entertaining us.
You are on to somethi g here...eliminate cash and you solve the following wars...in no particular order:
Terror
Drugs
Freedom
Theres whiskey in the jar!
Thanks for your thought
Hope your prepared to back up your ban personally. I doubt it.
I love your sarcasm. You almost had me.
Your sarcasm has run its course! Just shut the fuck up already!
His satire has barely scratched the surface.
Who are you to have the audacity to attempt to restrict another's speech?
That is a SOVEREIGN RIGHT.
The US Government is supposedly RESTRICTED from making laws abridging that SOVEREIGN RIGHT. (That did not stop them as they believe themselves to be above the law.)
And as for you??? You are just a evil as the US Gvernment.
So fuck off statist.
If you do not want to read it then do not read it. You are also free to leave Tyler's house anytime that you'd like.
ccc
I have to assume you are being sarcastic because the possibility that someone as dumb as you is lurking out there is too frightening to comprehend.
There are at least 162 Million of them in the USA alone.
Since the Mean IQ in the USA is roughly 100 it means that one half of all people have Double Digit IQs.
That is not really all that impressive. They'll make great pets.
You had best understand that far too many are far too limited in what they can comprehend.
As for fearing it? Hell no.
They cannot even plan a monthly budget as they are innumerate. If they tray to plan something devious and nefarious then they are soon caught up by their own FRAUD and DISHONESTY.
Actually I find humor in it as they are targets for far away laughter. They are clowns without any depth of thought.
The ones to rationally fear are the genius psychopaths with evil designs. Now they will be able to cause massive damage to far too many and their chances of being stopped are minimal as they have thought it through.
Yet even they will make mistakes as nobody is perfect. So that is when you can take them down.
Fortunately they are a rarity. So fear not and be bold in your actions.
Absolutley not, what would the treasury use to fill up old bottles burried in disused coal mines and covered with rubish? It can't be done electronically.
"...I think a total ban on cash wouldn't be that unreasonable."
A total ban on MillionDollarBonus would be better.
Money launderers do plenty with elctonic currency, through checking accounts. Just look at HSBC and the too big to jail issues. Eliminating cash is just a means of controlling and tracking who is spending what and with who. Cash is necessary for a "free" society. For example, you have a yard sale, Sales taxes have already been paid for the items where it was necessary, why would it be necessary to track someone buying a used blender? Unless of coarse you are a control freak and need to know everything for some other purpose.
Why does MDB_ get to upvote his own post 45 times?
All of his dead relatives get to vote.
haha MDB. My head almost exploded and then I read your user name. I was that close to smashing my third iMac.
That's why I only use ApplePay.
/sarc
MDB - class A dry as a bone sarcasm there, home run.
Off to the ATM!
"However cash allows money launderers and criminals to do business completely undetected by law enforcement."
Banks, politicians and the shadowy scum they associate with have been and are laundering money and even when caught no one goes to jail...
http://www.usatoday.com/story/money/business/2012/12/11/hsbc-laundering-...
There is no longer rule of law in the U.S.
Making cash illegal only tightens the noose around the neck of the common man.
@MillionDollarBonus_
Logged in just to upvote you! Hilarious...
MDB,
Not to mention it is unsanitary, a pain to carry around, and costs more to make than electronic payments!! I think the government is looking out for our best interests!
You guys have been trolled and rolled.
Nostradamus said this in the 1500's. He left things pretty open ended as well. Something about Lehman in there too...
[double]
Is Jon Corzine still free and still rich? Maybe he is still holding the missing cash for his clients?
for those who don't have cash ..what do they hold?
I do not remember anything like this ever ... such a controlled well advertized crash ... when will that happen? zh ... can you ask them date and time... i will try to find some cash to hold
The FED should issue a $3 bill and Jon Corzine's fat, pasty criminal face should be on it wearing black and white stripes. And on the top should read, "In MF Global We Trust"
....since it is only a claim against a bank. Better hold it in your hands.
In normal world, markets would have gone nuts today, with gold rushing up 50$, but now in this one.
Theres been no normal for 5+ years and counting
Normal?
Dr. Frederick Frankenstein: [to Igor] Now that brain that you gave me. Was it Hans Delbruck's?
Igor: [pause, then] No.
Dr. Frederick Frankenstein: Ah! Very good. Would you mind telling me whose brain I DID put in?
Igor: Then you won't be angry?
Dr. Frederick Frankenstein: I will NOT be angry.
Igor: Abby someone.
Dr. Frederick Frankenstein: [pause, then] Abby someone. Abby who?
Igor: Abby... Normal.
'That's Fronkensteen'
Loved it!
We've been stuck in the bankers dream world for the past 5 years: The moar' money they print the lower the price of gold and silver. The moar' money they print the higher the stawk market goes.
The moar' money they print the less chance they'll ever go to jail or their bank would ever be allowed to fail.
Truly a bankers dream!!
"Normal"?? Even the BBC news people were mystified on the TV yesterday when the price of paper gold did not move despite what they reported as massive buying of physical across Europe. the lady and man were both stunned and could not understand why the [heavy manipulate paper price] did not move up.
marxist price controls, wage controls, etc - that simple
Sure, the President's Working Group on Financial Markets stepped in. That's their job. But when the shit starts rolling down hill they go short. This because no crisis can go to waste.
Executive Order 12631--Working Group on Financial Markets
http://www.archives.gov/federal-register/codification/executive-order/12...Two players drive investement returns: for equities and bonds, it's the Fed. For gold and silver, it's JPM. As you say, there is no normal, new or otherwise.
panic!! fraear!!! lol gross is such a douche... wtf has changed? greece!? greece has been fucked for years. zh has understood this fact for quite some time
Gross is an idiot wrapped in a moron
What? His greatest Euro Bond short of our generation netted him 2% so far. Clearly his hyperbole is tradable for massive cash.
LOL. Must be the way you said it, but just - LOL.
Sometimes, you get the moron.
And sometimes the moron, why, he gets you.