• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

European Money Market Industry Shutting Down As Goldman Closes MM Fund, Says In "Unchartered Territory"

Tyler Durden's picture




 

Update: BlackRock to restrict subscriptions into 2 Euro money funds

We were the first to bring news that overnight JPMorgan has halted investment in its European money market funds following the ECB's decision to cut the deposit rate to 0%. Now, it is Goldman's turn:

  • GOLDMAN HALTS INVESTMENTS IN EURO GOV MONEY FUND AFTER ECB CUT
  • GOLDMAN SAYS MARKET CONDITIONS WILL DETERMINE WHEN FUND REOPENS
  • GOLDMAN DECISION AFFECTS EURO GOVERNMENT LIQUID RESERVES FUND

And finally the conclusion, which is rather obvious:

  • GOLDMAN FUND MEMO: EUROPEAN MARKET IN `UNCHARTERED TERRITORY' (Er, sic?)

More from Bloomberg:

JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and BlackRock Inc. (BLK) closed European money market funds to new investments after the European Central Bank lowered deposit rates to zero.

 

JPMorgan, the world’s biggest provider of money-market funds, won’t accept new cash in five euro-denominated money- market and liquidity funds because the rate cut may result in losses for investors, the company said in a notice to shareholders. Goldman Sachs won’t accept new money in its GS Euro Government Liquid Reserves Fund, and BlackRock, the world’s largest asset manager, is restricting deposits in two European funds.

 

JPMorgan’s five closed funds had 23.7 billion euros ($29.2 billion) in assets as of July 5, the bank said in an e-mail, about 22 percent of all euro-denominated money funds. The funds are JPMorgan’s Euro Liquidity Fund, Euro Government Liquidity Fund, Euro Money Market Fund, Euro Liquid Market Fund and JPMorgan Series II Funds -- EUR.

 

The deposit rate cut “will almost certainly move cash bids in short-dated instruments into negative territory, and so we have taken the step to restrict subscriptions and switches into the funds in order to protect existing shareholders from yield dilution,” JPMorgan said on its website.

 

The company had $417 billion in money fund assets as of May 31, making it the world leader, according to Crane Data LLC, a research firm based in Westborough, Massachusetts. The entire euro-denominated money fund industry has about 108 billion euros, Crane Data’s statistics show.

Effectively, the European money market industry is now closed and only redemptions will be allowed as nobody can make "money" in money markets in a Zero deposit rate environment. As another reminder, there are hundreds of billions in residual cash in various European money markets which is no longer welcome. Which then begs the question: as the cash is unwound will it go into:

i) stocks
ii) bonds
iii) mattresses
iv) breaking the Swiss National Bank as everyone buys CHF and send the nominal yield on the 2 Year Swissie to -#Ref!
v) gold

We will find out soon enough.

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 07/06/2012 - 13:30 | 2592505 veyron
veyron's picture

Goldman was late to the party ...

Fri, 07/06/2012 - 13:33 | 2592521 notbot
notbot's picture

Nothing to see here...private sector "Doing just fine"

Fri, 07/06/2012 - 13:35 | 2592530 Ahmeexnal
Ahmeexnal's picture

WAR.

Fri, 07/06/2012 - 13:45 | 2592574 Popo
Popo's picture

Buuut... did they really say "Unchartered" territory?   Because that would make zero fucking sense.   The term is "Uncharted" territory.   A typo on Tyler's part is of course forgivable.   A typo on a major Goldman press release on the other hand, just reinforces what we already knew:  These guys are neither the best nor the brightest.

Fri, 07/06/2012 - 13:45 | 2592589 bigdumbnugly
bigdumbnugly's picture

GOLDMAN FUND MEMO: EUROPEAN MARKET IN `UNCHARTERED TERRITORY'

so was the "uss minnow" and we all know the story from there.   

Fri, 07/06/2012 - 13:50 | 2592619 HoofHearted
HoofHearted's picture

I think Euroland is about to be in LTRO9.99 territory. If all the underfunded banks now have yet another bank run because people can't make any interest on their fiat, it spells higher leverage and more risk. Unwind in stocks from the banks, but if the Muppets know this they will grab stocks at the nadir. Personally I'd go for option v)- gold, but WTFDIK?

Fri, 07/06/2012 - 13:56 | 2592652 Rahm
Rahm's picture

Gold & Silver, cocksuckerz!

Fri, 07/06/2012 - 14:45 | 2592810 I think I need ...
I think I need to buy a gun's picture

10% stocks 90% gold ;)

Fri, 07/06/2012 - 14:06 | 2592691 Randall Cabot
Randall Cabot's picture

So was Henry Hudson and we all know what happened to him.

Fri, 07/06/2012 - 14:16 | 2592729 Miss Expectations
Miss Expectations's picture

Do I have enough time to pack my evening gowns?

Fri, 07/06/2012 - 14:19 | 2592740 Randall Cabot
Randall Cabot's picture

Took a second, LOL, good one.

Fri, 07/06/2012 - 14:44 | 2592809 bigdumbnugly
bigdumbnugly's picture

if you must.

but i'd kinda prefer clothing sewn from fronds and fig leaves and such.

Fri, 07/06/2012 - 14:48 | 2592821 Likstane
Likstane's picture

leave room to sew in barbarous relics.

Fri, 07/06/2012 - 15:01 | 2592848 bigdumbnugly
bigdumbnugly's picture

she could hide them inside the two coconut halves.

.

edit:  nah, first place they'd look.

Fri, 07/06/2012 - 15:23 | 2592963 Animal Cracker
Animal Cracker's picture

or green shoots?

Fri, 07/06/2012 - 15:00 | 2592875 Ookspay
Ookspay's picture

+ Ginger

+ Maryann

Sat, 07/07/2012 - 12:25 | 2594837 killedbyshortvol
killedbyshortvol's picture

Maryann all the way.

Fri, 07/06/2012 - 13:51 | 2592628 El Oregonian
El Oregonian's picture

It's unchartered because it was only supposed to be a 3 hour tour... Welcome to Gilligan's Island were we are all shipwrecked now...

Fri, 07/06/2012 - 13:55 | 2592634 Cast Iron Skillet
Cast Iron Skillet's picture

well, from the point of view of the squid, it might really be outside the charter usually bestowed to a CB, therefore unchartered.

Fri, 07/06/2012 - 13:53 | 2592639 Agent P
Agent P's picture

Supposably that's what they mint.

/sarc misspell

Fri, 07/06/2012 - 13:58 | 2592658 toady
toady's picture

I keep seeing these misspellings & misuses of every day phrases. It's almost like our educational system is failing us somehow ...

Fri, 07/06/2012 - 14:05 | 2592684 Agent P
Agent P's picture

"It's almost like our educational system is failing us somehow ..."

For all intensive purposes, I think its working just find.

/common blunders

Fri, 07/06/2012 - 14:26 | 2592761 Taffy Lewis
Taffy Lewis's picture

If I loose more money, I might have to move to Columbia.

/my 2 favorites

Fri, 07/06/2012 - 14:47 | 2592820 THX 1178
THX 1178's picture

You should have ended that sentence with an explanation point.

Fri, 07/06/2012 - 15:36 | 2593022 Silver Pullet
Silver Pullet's picture

That one is more then common.

Fri, 07/06/2012 - 15:25 | 2592972 Animal Cracker
Animal Cracker's picture

Too bad people take it for granite.  Or am I making them the escape goat?

Fri, 07/06/2012 - 15:41 | 2593054 Al Huxley
Al Huxley's picture

Its really a mute point anyway.

Fri, 07/06/2012 - 15:26 | 2592973 Thorny Xi
Thorny Xi's picture

Bernie Madoff was a pioneer in unchartered territory.  After all, if he'd had a bank charter, he'd have just been bailed put.

Fri, 07/06/2012 - 17:54 | 2593402 Clashfan
Clashfan's picture

Of course. Because the best, the brightest, and the hottest work for Bloomberg financial news.

Here's one of them, Sarah Eisen, so bored to be earning the big bucks pimping for the mainstream media that she is apparently caught, on camera, playing with the huge, black strapon under her skirt? Really? Really?

http://www.dailymotion.com/video/xquxle_reporter-caught-off-guard-with-s...

The ramifications of this are simply preposterous.

Fri, 07/06/2012 - 18:56 | 2593492 Clashfan
Clashfan's picture

Of course, every "conspiracy" needs an "official explanation." Here it is:

http://www.allvoices.com/contributed-news/12173898-news-anchor-sara-eise...

First, the other reporter's mic was malfunctioning, not Sarah's. Second, do they really believe that readers would think that she would have a microphone between her legs or have to hike up her skirt to fix it? Third, the piece mentions nothing about a strapon, which this image clearly represents. Of course, the piece offers no image.

It's important why? Because it shows how blatantly the mm lies. Can you not see it? The chick got caught playing with a strapon, and the spin is utterly ridiculous.

Fri, 07/06/2012 - 13:38 | 2592548 sickofthepunx
sickofthepunx's picture

thanks to govts assuming all of their bad debts, why yes, it is

Fri, 07/06/2012 - 14:10 | 2592702 Stock Tips Inve...
Stock Tips Investment's picture

The intervention (manipulation) of the market by the ECB will have consequences in several respects. The decision is correct and GS is one of those consequences. The economic outlook continues to deteriorate in Europe and U.S. will have its effects. Wall Street has taken note of this. Today comes back. This situation will cause movements in the stock market. If we listen, we can benefit economically. Will be one of those few great opportunities.

Fri, 07/06/2012 - 14:10 | 2592706 Randall Cabot
Randall Cabot's picture

This could be serious: 2PM and not a ramp in sight.

Fri, 07/06/2012 - 18:16 | 2593440 Offthebeach
Offthebeach's picture

How can I as a designated Muppet offer up what little wealth that I have to the mighty Squid'n Whale?
I could also do a kidney, heart, lung, liver if say Paulson or such or family need a sacrifice. My family would be so proud.

Fri, 07/06/2012 - 13:32 | 2592512 hack3434
hack3434's picture

Spam!

Fri, 07/06/2012 - 13:40 | 2592560 papaswamp
papaswamp's picture

Spam and Reese's PB cups

Fri, 07/06/2012 - 13:33 | 2592517 Dr. Engali
Dr. Engali's picture

<---VI) silver

<---VII)Gold ,silver, and mattresses.

Fri, 07/06/2012 - 13:36 | 2592536 surf0766
surf0766's picture

<---- VIII) food water lead

Fri, 07/06/2012 - 13:39 | 2592546 Dr. Engali
Dr. Engali's picture

Too many options and too few arrows.

Fri, 07/06/2012 - 13:39 | 2592549 TrainWreck1
TrainWreck1's picture

<---- IX) Obama's stash

:(

Fri, 07/06/2012 - 13:39 | 2592556 Nothing To See Here
Nothing To See Here's picture

IX) <----- Green technologies creating thousands of billions of new jobs

X) <------ Campaign contributions to Obamney

Fri, 07/06/2012 - 13:47 | 2592602 francis_sawyer
francis_sawyer's picture

XI) "Corzined"

Fri, 07/06/2012 - 13:51 | 2592631 A Lunatic
A Lunatic's picture

XII hopium.

Fri, 07/06/2012 - 14:10 | 2592709 Agent P
Agent P's picture

<--- XIII) Hookers & Blow

<--- XIV) Additional Secret Service Protection (aka Hookers & Blow)

Fri, 07/06/2012 - 13:40 | 2592559 littleguy
littleguy's picture

<--- Ammo

Fri, 07/06/2012 - 13:33 | 2592520 dannyboy
Fri, 07/06/2012 - 13:33 | 2592523 Glasgow Gary
Glasgow Gary's picture

No, they didn't use the illiterate "unchartered" when meaning to write "uncharted" did they? What's next, using "loose" when meaning "lose"?

Fri, 07/06/2012 - 13:39 | 2592551 Unprepared
Unprepared's picture

I though the whole idea of the EU is to make the territories unchartered... I mean uncharted.

Fri, 07/06/2012 - 13:54 | 2592636 TruthInSunshine
TruthInSunshine's picture

GoldmanSquid, JPMorque and all the feeders off the mammary gland of the nanny-state (funded, mainly through collateralization of taxpayer debt slaves, current and future born) need to create an EPIC Hank Paulson "Tanks in the Streets & Martial Law by sunrise if we don't get more heroin, only this time provided to us on a massive, global, unprecedented scale, in the form of GLOBAL TARP/TALF/QE/KITCHEN SINK DOLLA' DOLLA' BILLS, YO" moment.

Look for really scary proclamations and dire warnings from the Too Big To Fail (but too f*cked up to truly fix) racketeers/junkies in increasingly ominous and alarmist volume over the coming days, weeks, until they get want they want.

Just like last time, if it takes quote stuffing-to-bidless markets to scare the 401(k) bagholders into phoning/emailing their "elected representatives," they'll take the indices all the way DOWN TOWN.

Fri, 07/06/2012 - 15:39 | 2593045 Arnold Ziffel
Arnold Ziffel's picture

I remember Hank:

 

WASHINGTON, D.C. -

For Henry Paulson Jr., a Goldman-sized tax loophole awaits his pleasure.

He has amassed quite a fortune--a roughly $700 million equity stake in Wall Street's premier investment banking house. And soon, he will have the chance to diversify a good chunk of those holdings without paying a dime to the Internal Revenue Service.

By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.

 

http://www.forbes.com/2006/06/01/paulson-tax-loophole-cx_jh_0602paultax....

Do NOT follow this link or you will be banned from the site!