myinvestorsplace
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Where Do We Put Our Money?
Seems like all the rules of the game have changed.. All norms have changed..
The Reserve Primary Fund had $62.6 billion in assets as of last week and it one of the largest money-market funds. However they owned some Lehman toxic paper.. and the cardinal rule of parity to the US Dollar net asset value crashed... Now for every dollar... it is only worth .97 cents. All that loss to low interest rate...one can easily be shocked....
I am sure all know by now the Auction Rate Security Debacle as well... this was suppose to be a short term slightly higher yield than most other short term deposits... The only problem...is this also BLEW UP... and so many investors can not redeem their money... I am sure the story will continue...and possibly get worse...
So this brings us back to
WHAT TO DO WITH OUR CASH????
If you have less than $100,000 dollars you are insured by the FDIC right??? Well in one of my last postings on this blog... capitalinvestor1836.. I presented the weakness of the FDIC and how little money they really have to play with.. Quick summary...FDIC was holding approx 53 Billion..This year.. there have been several small banks that failed.. but one large on called Indy Mac... They took with them approx 10 Billion dollars from the kitty... So how do you feel now..With Lehamn imploding..AIG imploding... isn't quite possible there will be another dominoe falling... I would bet yes... so how the FDIC protect your money???
They are running out of money ...The same as the FED.. the only choices are to "PRINT MONEY" or RAISE TAXES... that is it... the feel good 400 some odd point rally yesterday... possibly has not changed anything... as well as all the emergency liquidity injected into the markets from all the central bankers all over the world...
SO WHAT DO WE DO WITH OUR MONEY???
Everyone is looking for answers... and this is a very tough question... I trust the US govts ability to tax and print money... I do not trust the FDIC ..I do not trust the money markets.. I do not trust the banks...
I believe anything can happen... and I believe ( Hope) that possibly yesterdays FED actions.. will help confidence and the markets... I suggest.. have a plan... nothing that is seat of the pants.. nothing induced by fear... something that fits your personality...I personally have been ....this year and last...rolling over short term US GOVT interest rate vehicles... historically they have been the safest... that is registered only in my name and my wife's name.. not the bank's name...this is an important issue... As well I personally watch the dollars strength...and as airlines hedge their risk with the price of oil... I will be hedging my dollar in case of weakness...
These are tough times... One needs to think of return of money as a pose return on money!
Andrew Abraham
Seems like all the rules of the game have changed.. All norms have changed..
The Reserve Primary Fund had $62.6 billion in assets as of last week and it one of the largest money-market funds. However they owned some Lehman toxic paper.. and the cardinal rule of parity to the US Dollar net asset value crashed... Now for every dollar... it is only worth .97 cents. All that loss to low interest rate...one can easily be shocked....
I am sure all know by now the Auction Rate Security Debacle as well... this was suppose to be a short term slightly higher yield than most other short term deposits... The only problem...is this also BLEW UP... and so many investors can not redeem their money... I am sure the story will continue...and possibly get worse...
So this brings us back to
WHAT TO DO WITH OUR CASH????
If you have less than $100,000 dollars you are insured by the FDIC right??? Well in one of my last postings on this blog... capitalinvestor1836.. I presented the weakness of the FDIC and how little money they really have to play with.. Quick summary...FDIC was holding approx 53 Billion..This year.. there have been several small banks that failed.. but one large on called Indy Mac... They took with them approx 10 Billion dollars from the kitty... So how do you feel now..With Lehamn imploding..AIG imploding... isn't quite possible there will be another dominoe falling... I would bet yes... so how the FDIC protect your money???
They are running out of money ...The same as the FED.. the only choices are to "PRINT MONEY" or RAISE TAXES... that is it... the feel good 400 some odd point rally yesterday... possibly has not changed anything... as well as all the emergency liquidity injected into the markets from all the central bankers all over the world...
SO WHAT DO WE DO WITH OUR MONEY???
Everyone is looking for answers... and this is a very tough question... I trust the US govts ability to tax and print money... I do not trust the FDIC ..I do not trust the money markets.. I do not trust the banks...
I believe anything can happen... and I believe ( Hope) that possibly yesterdays FED actions.. will help confidence and the markets... I suggest.. have a plan... nothing that is seat of the pants.. nothing induced by fear... something that fits your personality...I personally have been ....this year and last...rolling over short term US GOVT interest rate vehicles... historically they have been the safest... that is registered only in my name and my wife's name.. not the bank's name...this is an important issue... As well I personally watch the dollars strength...and as airlines hedge their risk with the price of oil... I will be hedging my dollar in case of weakness...
These are tough times... One needs to think of return of money as a pose return on money!
Andrew Abraham
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