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:


And finally the conclusion, which is rather obvious:


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.

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veyron's picture

Goldman was late to the party ...

notbot's picture

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

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.

bigdumbnugly's picture


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

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?

Rahm's picture

Gold & Silver, cocksuckerz!

Randall Cabot's picture

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

Miss Expectations's picture

Do I have enough time to pack my evening gowns?

bigdumbnugly's picture

if you must.

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

Likstane's picture

leave room to sew in barbarous relics.

bigdumbnugly's picture

she could hide them inside the two coconut halves.


edit:  nah, first place they'd look.

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...

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.

Agent P's picture

Supposably that's what they mint.

/sarc misspell

toady's picture

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

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

Taffy Lewis's picture

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

/my 2 favorites

THX 1178's picture

You should have ended that sentence with an explanation point.

Silver Pullet's picture

That one is more then common.

Animal Cracker's picture

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

Al Huxley's picture

Its really a mute point anyway.

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.

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?

The ramifications of this are simply preposterous.

Clashfan's picture

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

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.

sickofthepunx's picture

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

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.

Randall Cabot's picture

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

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.

papaswamp's picture

Spam and Reese's PB cups

Dr. Engali's picture

<---VI) silver

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

surf0766's picture

<---- VIII) food water lead

Dr. Engali's picture

Too many options and too few arrows.

TrainWreck1's picture

<---- IX) Obama's stash


Nothing To See Here's picture

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

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

Agent P's picture

<--- XIII) Hookers & Blow

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

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"?

Unprepared's picture

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

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.

Arnold Ziffel's picture

I remember Hank:



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.