Here is comes...Money market fund breaks the buck!

[Buttercup McToots]

Money market fund breaks the buck!

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(posted on Ozy's thread also, for discussion)

Here is comes...

http://www.marketwatch.com/news/stor...%7D&dist=msr_1


Quote:
NEW YORK (MarketWatch) -- One of the first and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."
Primary Fund (RFIXX: ) , a $64 billion fund managed by money market fund inventor The Reserve, said late Tuesday that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero.

As of 4 p.m., the value of the fund's share was 97 cents. The Reserve said that redemption requests received before 3 p.m. will be paid out at $1 a share.

While Primary Fund's Lehman holding was small compared to the fund's overall size, the fact that it froze redemptions reflects a surge in redemption requests by investors.

"Effective today and until further notice, the proceeds of redemptions from The Primary Fund will not be transmitted to the redeeming investor for a period of up to seven calendar days after the redemption," The Reserve said in a statement. Officials at the company declined to comment further.

Money market funds pride themselves on their liquidity and the safety of their investments. All money market shares are priced at $1 -- a figure so important to the industry that fund companies take losses to keep the share price from dipping below $1, which is known as breaking the buck.

"They didn't just break the buck, they shattered it," said Don Phillips, managing director at investment research firm Morningstar Inc. (MORN: 59.28, -0.78, -1.3%) .

[Newsjock]

1. Looks like we're all royally bucked

Thank you, Senator Blackberry.

[DJ13]

2. Link isnt working

[Buttercup McToots]

5. New linky

http://www.marketwatch.com/news/story/money-market-fund-breaks-buck/story.aspx?guid=%7B56A2CEE5-5A53-4A27-A4BA-585CFBE173A4%7D&dist=msr_1

[Buttercup McToots]

3. Barclays Stockbrokers are displaying this announcement:

Barclays Stockbrokers are displaying this announcement:

Important Information in trading of Exchange Traded Commodities (ETCs)
Please be aware that following an LSE announcement a number of ETCs have been placed into an ongoing auction period and, as a result, are not available for trading. This is a market wide issue.
Should you be placing an order online for an ETC, please ensure you monitor the status of your order as affected ETCs will be rejected as pricing is not currently available.
Barclays Stockbrokers will continue to work closely with the LSE to monitor the situation and will provide updates on our Message Centre

[magellan]

4. Financial markets imbecile here. What does this mean? n/t

[Buttercup McToots]

7. Read OZY's thread in LBN

very smart on the market...

[magellan]

8. Thanks! n/t

[A HERETIC I AM]

11. It means that if you had money in this one single fund, one of hundreds of them out there...

your balance went down by 3 cents on the dollar.

If you had a balance of $10,000 yesterday your balance is now $9,700.00 in a fund whose primary purpose is the preservation of that $1.00 share price and secondary objective is to provide yield.

This is ONE SINGLE MONEY MARKET FUND out of almost 2000 of them.

[magellan]

12. Well, at least that's not so terrible as it sounded

Thank you.

[LondonReign2]

6. Happened once at Strong Funds too

before they were acquired by Wells Fargo. They too took a loss to make investors whole.

[spinbaby]

9. What does this mean for us?

Our son's tuition money is in a money market fund.

[Buttercup McToots]

10. you need to find out

what the implications are...call...