Money market funds and CDs are currently participating in the U.S. Treasury’s Temporary Guarantee Program for Money Market Funds which is scheduled to expire on April 30, 2009.
A year ago, when money markets and CDs started losing asset value, investors started a run taking out their money. The US government stepped in to guarantee all capital investments in money market funds, but only as a temporary measure. That temporary guarantee is now set to expire in just two weeks. If you think you are safe from an implosion in your money market, think again! Unless Obama passes another emergency money market insurance extention, then you can expect that the “breaking of the buck” will resume in May. You have been warned! (Source.)
Enlightenment? (A) The Bank for International Settlements says there are about $700 trillion in outstanding derivatives. (B) Global stock markets total market capitalization is about $30 trillion. Somehow I’m supposed to believe that A is okay and not a threat to B. Hmmmmmm . . .