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  • msf August 2017
Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Once Shunned, Money Market Funds Are Proving To Be An Unlikely Haven

FYI: Cash is flowing into short-term U.S. government debt funds at the fastest pace in more than six months, just when you might expect investors to be running for the exits.
Regards,
Ted
https://www.bloomberg.com/news/articles/2017-08-23/once-shunned-money-market-funds-proving-to-be-unlikely-haven

Comments

  • Muddled writing in the article, but an interesting graphic. Short term Treasury bill debt that matures at the end of Sept. (when the debt ceiling is projected to be hit) has fallen sharply in price (yield is spiking). People are pricing in the risk of late repayment of principal.

    image

    While I'm not suggesting a total financial collapse, it wouldn't hurt to check your bank's rating (FDIC could theoretically get stressed and have no Treasury backstop). It's also interesting to ponder the possibility that prime MMFs might be safer than the government MMFs that people were funneled into for safety.

    That mattress is beginning to look better and better:-)

    FWIW, ratings of some of the better known online banks (see depositaccounts.com)
    Ally Bank: A+, 1.15% savings
    Amex Bank: A, 1.15% HY savings
    Barclays: A, 1.15% savings
    Discover Bank: A, 1.15% savings
    Goldman Sachs: A+, 1.20% savings
    Synchrony Bank: A, 1.20% HY savings
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