Putnam, Mellon Spur `Oh, My God' Money-Market Flight

[marmar]

from Bloomberg:



Putnam, Mellon Spur `Oh, My God' Money-Market Flight (Update2)

By Michael Janofsky

Sept. 19 (Bloomberg) -- Before yesterday, Sheila Bialka, a retired dance and drama teacher in Laguna Woods, California, said she hadn't thought about shifting money out of her money-market account.

Then she learned that Boston-based Putnam Investments LLC closed its $12.3 billion institutional Putnam Prime Money Market Fund and a similar fund run by Bank of New York Mellon Corp. had fallen to less than $1 a share. BNY Mellon's shares fell as much as 36 percent yesterday, then mostly recovered amid a broad market rally and gained as much as 36 percent today.

``Oh, my God,'' said Bialka, 74, whose money is with Fidelity Investments. ``Now I think I will move it. I wasn't concerned before. Now, I am.''

Advisers say larger companies, such as Boston-based Fidelity, have more resources to prop up their money-market funds. Still, fears over potential losses in the low-risk investment accounts have become the latest source of angst for investors as they adjust their portfolios and lifestyles to the tremors of Wall Street.

Investors pulled a record $89.2 billion from money-market funds on Sept. 17, according to data compiled by the Money Fund Report, a newsletter based in Westborough, Massachusetts. The withdrawals totaled a decline of 2.6 percent in money-market assets.

The redemptions countered a trend in which assets in money- market funds increase almost 14 percent, to $3.58 trillion, from January to the beginning of September, according to IMoneyNet Inc., the research firm that publishes the Money Fund Report. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=a6KUeuLbdNuA&refer=home

[Tandalayo_Scheisskopf]

1. Andrew Mellon Quotation:

"Depressions are when money returns to its rightful owners"

[54anickel]

3. And in today's economy debt is money....or at least it was.

[54anickel]

2. Sad, people pulled back from mutual funds/equities into their MM thinking they'd be play it safe

and ride out the storm for this year. They still got stung. What's a person to do?