Proposed SEC Regulation Cuts Off Access to Money Market Funds During Crisis
Maybe if I go back to bed, this will all turn out to be a bad dream? No such luck. Our corrupted, money-centered political system looked at the recent events, saw how lack of regulation and enforcement turned the economy on its head, and concluded... what? That it would be better to reward the perpetrators by protecting them from consequences!
What they're really doing is constructing a system where people will return to keeping their money in a shoebox under the bed:
...The primary purpose of money markets is to provide virtually instantaneous access to a portfolio of practically risk-free investment alternatives: a typical investor in a money market seeks minute investment risk, no volatility, and instantaneous liquidity, or redeemability. These are the three pillars upon which the entire $3.3 trillion money market industry is based.
Yet new regulations proposed by the administration, and specifically by the ever-incompetent Securities and Exchange Commission, seek to pull one of these three core pillars from the foundation of the entire money market industry, by changing the primary assumptions of the key Money Market Rule 2a-7. A key proposal in the overhaul of money market regulation suggests that money market fund managers will have the option to "suspend redemptions to allow for the orderly liquidation of fund assets." You read that right: this does not refer to the charter of procyclical, leveraged, risk-ridden, transsexual (allegedly) portfolio manager-infested hedge funds like SAC, Citadel, Glenview or even Bridgewater (which in light of ADIA's latest batch of problems, may well be wishing this was in fact the case), but the heart of heretofore assumed safest and most liquid of investment options: Money Market funds, which account for nearly 40% of all investment company assets. The next time there is a market crash, and you try to withdraw what you thought was "absolutely" safe money, a back office person will get back to you saying, "Sorry - your money is now frozen. Bank runs have become illegal." This is precisely the regulation now proposed by the administration. In essence, the entire US capital market is now a hedge fund, where even presumably the safest investment tranche can be locked out from within your control when the ubiquitous "extraordinary circumstances" arise. The second the game of constant offer-lifting ends, and money markets are exposed for the ponzi investment proxies they are, courtesy of their massive holdings of Treasury Bills, Reverse Repos, Commercial Paper, Agency Paper, CD, finance company MTNs and, of course, other money markets, and you decide to take your money out, well - sorry, you are out of luck. It's the law.
that nothing has changed. Welcome to Bush II. Obama, all smoke and mirrors and eloquent speeches. Meet the new boss, same as the old boss.
The punishment which the wise suffer who refuse to take part in the government, is to live under the government of worse men.
Plato
commercial credit markets which are backed by MM reserves...This is absolutetly crazy... This is not Obama but Bernanke and Geitner..Come on folks --who do you think works on the ponzi game...
Think maybe the return to local owned banks is the right way to go...Just check their P&L and the owner structure!
with the bullcrap. Saying there's no diff between Obama and Bush is like saying there was no diff between the America occupation of Germany & Hitler.
Godwin's Law…
statusquObama, change you can only pretend in
Nein.
On these people!
I've been watching them do crap like since ronney and I am tired of all the lies and dirty dealing.
WE really need to empty washington and wallstreet, burn it to the ground!
The SEC pretty much is there to protect the system, not the investors. Welcome to Bank-run government.
maybe the American creditor public should organize
a national don't pay your credit cards or mortage payment
month in which NO ONE pays the banks a f#cking dime that
month. of course this will cause more than total disruption
of the banking/credit card companies, but who cares...
maybe the threat that millions of Americans will have
the balls to organize this attack might push them
into becoming rational and honest brokers......NOT
yes this idea is very irrational. i am tired of
supporting CEO's mega salaries and bonuses....
i can barely keep up my bills and the credit
card companies have all just raised their rates
before the new laws go into effect soon....well
i have had it with the greed of the banks/credit card
corporations.....
Its nobodys fault buy YOURS that you are barely keeping up with your bills. Do you have a cable bill? Is it worth about $1000/yr.
YOU signed the contract for the credit cards, used them, and now want to default on a legal contract that you SHOULD have had both eyes open when you signed? If your set of morals are so loose as to be defined by the actions of others, then its no wonder you find yourself in the position that you do.
I for one wont be joining your incredibly selfish idea, you see I will pay my credit card bill this month... its $0.00. I will also be able to comfortably pay my living expenses because I didnt buy a giant house that I dont need, and look forward to the day when its paid off 5X faster than the term of the loan...
You say the lenders need a threat to become 'rational and honest brokers'... well, you arent displaying that you are a rational and HONEST debtor, so why should the lenders?
STOP BUYING USELESS SHIT AND BLAMING EVERYONE ELSE FOR YOUR PROBLEMS!
P.S. - MY credit card rates actually went down before the laws went into effect. So your premise that ALL of them went up is false.
Who have cut back? Who did limit themselves. Who were very consciences about how they went about their financial world?
What about them. We all know the credit card companies gash us. Make sure you don't fall on hard times bud. Because , they'll show you very little mercy. You better have a credit rating over 750 to get some mercy. Mine was. I double payed my cc bills.Every month.
And guess what? I was late by one day. They doubled my rates.
Just like that.
So, your argument(Rant) falls flat on it's face. Because all you're doing is ranting.
Just wait bud. Your turn is coming. This economy will not rebound anytime soon. Do you own your own home? If you do, you took a hit. How about an IRA? You took a hit. What kind of work are you in? You'll only be safe if your(Check that) you're not safe.
A lot of good people are taking huge hits right now. This isn't over. Far from it. "So why should the lenders?"
Are you for real?
What is your conceptual, continuity?
I can only assume that by 'double pay' you mean paid twice the minimum balance. Im sorry, but I have ZERO sympathy for you. Do you think money is free? Did you think you were special and the terms of the agreement didnt apply to you? Im assuming you did, because of your use of the word 'only' in 'only one day late'. A credit card company is in the business to make money, and rates are set according to risk and demand. They didnt single you out for paying one day late, and its not personally anything against you. Your financial illiteracy when it comes to credit cards is what caused your rates to double, not any fault of the card itself. Its just a piece of plastic, after all.
In the VERY rare cases where I have to use my credit card, its paid off fully before the next statement comes. As far as 'taking a hit' if I have my own house... I fail to see how having a roof over my head, and a warm bed to sleep in is in any way 'taking a hit'. I guess we have different mindsets, where I see a house as shelter, you see it as an 'investment'. As for my work, well Im safe, and thats all you need to know about that.
We do agree on one thing though. This isnt over, far from it. I only wonder if you understand why its not over though, and why its a GOOD thing that its not over.
You need to learn that this is a point where you need to re-asses your understanding of the financial tools that you use, as you obviously have been operating under an incorrect and/or incomplete understanding of them.
Or as I like to say, "Welcome to the United States of Bank of America."
My strategy of remaining flat broke is looking pretty smart right now.
This line is for people who have money with the bank...please step aside.
http://www.southparkstudios.com/clips/222624
audit-prosecute-incarcerate
Let's not forget how hard the folk here at C&L (but not really Joe A.) really pushed hard for Obama over the other democrats in the primaries. How's that Hope and Change (tm) working for you?
After the disaster that was republican rule for 8 years the democrats could have gotten anyone we wanted elected.
President BH Obama is little more than a figurehead. The Wall Street Bankers are solidly in control, not only of the USA's economy but also it's government. We need a patriotic Samson (or many) to pull down the walls of their temple before we are all given our (final?) economic "haircut".
This proposed change to SEC regulations not only helps to prevent a run on the banks, which the FDIC was designed to do, but it also will force many many average Americans back into the stock market. As far as I am concerned, nobody but arbitrage Capitalists still belong in the market. Without a thorough public audit of the Federal Reserve, the stock market today resembles nothing as much as a giant Ponzi scheme.
Can everyone say "Pump and Dump" three times fast, without gagging?
(ed. Nice, and timely, post, Susie!)
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
Maybe it the sleep depvation but is Bush and the GOP still in office or what? No seriosuly how the hell does then help the people. How is this even a center policy? This is neocon logic here plain and simple.
Please someone some Obama super supporter try and explain through twisted logic that this is a good thing. I need the false hope.
I continue my daily quest to comprehend in full the nature and depth of the debacle that is confronting us.
In the process I attempt to assess the political stance of all of the sources that I review.
In the Left-Right conundrum of politics, what I hold as the fundamental definition is this:
The Right is for the conservation of the interests and powers of those who in the modern period have already accrued the greatest powers. In other words, the capitalists (wealthy by definition). They are 1% of the US population. They have substantial power over their own lives, if they are greedy bastards (more to follow) they want complete control.
The Left is, or should be for the improvement of the interests and powers of those who EVEN in modern period, in the US, still find their conditions in jeopardy. The working class, who are the 62% to 80% of the US population. These are people who DO NOT have the authority or the power to determine the nature of their own work. They do not have control over their lives.
I should say that as a matter of morality, being wealthy is not a sin. But being wealthy and still thinking that you do not have enough already, that is a sin. Because then you are a greedy bastard.
That is the problem the Capitalists have.
Propaganda in general is their tool to advance their interests, because if they cannot rely on violence to control the population in what is euphemistically called a democracy, they must use deception.
They must do something, because their 1% will not win any elections. Even if the entire middle class of Doctors, Lawyers, middle managers and what have you, side with them, that is not enough.
They use propaganda to confuse, divide and conquer.
Zero Hedge is an irreverent anti authoritarian source of information, I read them daily, they are by their own admission, capitalists. I have yet to fully determine the full nature of the ramifications of that declaration, and what they mean by it.
What needs to be understood is on which side the sympathy lies in the great social dichotomy.
So far, in the Obama administration, there is almost no one on the side of the working class, the common man.
That I can see, except for perhaps Elizabeth Warren.
statusquObama, change you can only pretend in
There's no one on the side of the working class in Washington at all.
They all get paid six figures. They dine with the elite, keep company with the elite, they are our nobility in function and appearance.
If one were to suggest that Congresscritters' pay be scaled down to that of the average middle-class worker, there'd be a hue and cry as to how we're being unfair or somehow penalizing those who are successful. But the truth is, there are millions of Americans who pay their bills, run their businesses, run their households, and raise their children WITHOUT the benefits of the ruling class.
And so, we get EXACTLY what we pay (and vote) for: people who perpetuate 'the system.'
It is astounding how far greed has taken us. Like Nero? We are or maybe they should be burning.
Re: your thoughts, a short quote from Lao Tsu in the Tao Te Ching (written in the 6th Cent. B.C.)
"....There is no greater calamity than acquisitiveness
out of control.
Only those who know when enough is enough
can ever have enough."
"Egotism is the anesthetic that dulls the pain of Stupidity" - Frank Leahy
"What they're really doing is constructing a system where people will return to keeping their money in a shoebox under the bed."
WoW! So true. I put $5000 in my shoebox last night.
Never know when Cheney or Paulsen might get an itch to go to the Riviera.
it doesn't cut off anything, yet.
withdrawl our money now, before the crisis freezes everything. This is basically a law that will cause runs on banks, so get your money out immediately since once the runs starts, your money is gone.
Get it out.
..running government
the grotesque carnival of rackets and lies that the US economy has become -- held together with the duct tape of stimulus cash, gamed accounting, mortgage subsidies, carry trades, TBTF bailouts, TARPS, TALFS, shell-game BLS reports, and MSNBC "green shoots" cheerleading -- gives every sign of tipping into collapse at a moment's notice.
As the "pro's" see it.
I just read his Clusterfuck this morning too.
He's not very optimistic, is he?
Here's one for ya'll:
Has anyone noticed the little signs at the banks lately that say that "ALL INTEREST BEARING CHECKING ACCOUNTS WILL NO LONGER BE PROTECTED BY THE FDIC".
So, I guess that means if you have a checking account with ten grand in it and it is "non-interest" bearing that if shit hits the fan and the bank gets in trouble that you'll be covered.
But if you have an "interest-bearing" account with that ten grand in it and shit hits the fan you'll be told, "So sorry...but your money just flew off into little pixel land and it's playing with all those nasty little derivative pixels....remember those?"
Here's a link to explain:
http://209.157.64.200/focus/f-news/2386368/posts
I saw the sign at my bank and I asked the teller about it and all she could say was, "Humina, humina, humina."
Plus, better watch out that your bank doesn't suddenly make your account "interest bearing" without you realizing it.
Has anyone else seen these signs at their banks??
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
So much stuff to buy, (on credit) . . shopping to do!
...treating a symptom... The only positive I can see coming from this is a potential shift back to simple savings, and a heightened use of Local Credit Unions. That is, if people are paying attention. Other than that, the real underlying rot of our economy will remain untouched. While this may avert a short-term fluidity crisis (on the part of the corporation, natch!), long-term, the effects will be nothing but negative. An act to require all states to allow universal use of local credit unions to state residents would do quite a bit more, but restricting use of consumer funds (and thereby credit) from use as a non-real trading implement or worse, an un-owned investment would probably help a good bit more...
Just think, most of this would never have happened if not for the film "Wall Street"...
??
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
No, they are not. But the banks that hold their deposits are.
"Anyone that makes less than $150K in this country, has no business voting Republican."
from U.S. Bank to the Entertainment Credit Union in Culver City. But when they said they weren't covered by FDIC it made me nervous.
I wonder why they didn't inform me that I WOULD be covered (in a round about way)?
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
Here ya go, Abby.
http://www.ncua.gov/
"Anyone that makes less than $150K in this country, has no business voting Republican."
...as a general rule, they aren't gambling with both your savings and your debt to them...
I'm off to the Credit Union!
Ta-ta!!!
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
home payed off, all personal property payed off, credit cards payed off, everything paid off are worried.
Geithner, Rubin, Paulson, Bernanke, Blankfein and these guys should be grateful Americans are so "tolerant and forgiving". . . passive.
It looks like I need to move my money to Canada, but not so much into a Canadian bank so much as a Continental bank with branch offices in Canada. I don't know if there are anything other than foreign "Central Banks" represented in Canada -- its a bit difficult to sort out without some authoritative info. The idea is to literally switch into interest bearing accounts denominated in Euros rather than US or Canadian Dollars.
While the Canadian banking system is far more stable that the USA system is, it appears that the Canadian Dollar is too closely tied to the US Dollar, and when the US Dollar collapses it will likely take the Canadian currency with it. The exceptions, of course, are Canadian gold coins, which keep looking like a better and better investment, IMHO.
I think that there is a road trip to Quebec or Ontario Province in my near future.
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
convert to gold.
do it here in the U.S.!
mail order the coins! (bury them in the backyard)
audit-prosecute-incarcerate
rather, interest-bearing accounts denominated in Euros under the auspices of Canadian, not USA, banking laws. I have found a rather short list of what is classified as foreign "Commercial Banks", which doesn't sound altogether "consumer-friendly".
Canadian gold coins are probably out of the question for me -- purchase in Canada is subject to VAT and possibly other taxes, and conversion back into currency too slow and costly -- too illiquid. If I had more money, gold would be part of my portfolio -- but any stocks, not so much (read here, None!).
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
The only reason I have any money at all is because I sold my backyard, and house. I took a nice "bath" in the process, as well. No mortgage doesn't count for diddle if you have no income and little savings. RE taxes continue to climb, as well as that little issue of COL. With any luck, my health will hold out just about as long as my pittance of savings.
There are a lot of people who are going to be financially "shocked" when both the Commercial RE and Private RE values take another dip. I am reminded of a couple of old FireSign Theatre quotes:
"What chance does that dead and returning veteran have for that job?"
AND
"Hang onto your shoes. Jobs IS on the way!"
Who knew 30 years ago that the political and social commentary of FireSign Theatre would still be relevant. It's a sad statement of fact that our voluntary preemptive foreign military adventures IS this country's Jobs Program.
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
Well well, Obama is, once again, catering to the banking, corporate and wealthiest interests in the country by fucking over the rest of us.
How much more does this guy, and the rest of the piece of shit Democratic Party, have to shit on their rank and file members before they wake up?
2013 and find out that that return they thought they were getting has been taken by the IRS in the form of a penalty for not having purchased health insurance.
Forget about fixing the car with that return.
That's when shit's gonna hit the fan here. People are going to feel VIOLATED when their tax preparers tell them the news.
And once the penalty money has been confiscated they STILL WON'T HAVE HEALTH INSURANCE!!!
Suckers.
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
We need to support these ideas.
It's the best we can get. Don't worry. They'll fix it later.
"Anyone that makes less than $150K in this country, has no business voting Republican."
MSNBC's fine "The rise of the permanent temporary workforce Pay is falling, benefits are vanishing, and no one’s job is secure" as a statement of the sad but obvious.
What we're suffering through is web-based colonialism at its worst. You lose. No tariffs on imported data and so as a result, off goes your job to the global lowest bidder.
It's the American way!!
USA! USA! USA!
"Anyone that makes less than $150K in this country, has no business voting Republican."
and jobs to be had. If you don't mind getting into the sin and death sector. Leave your conscience at the door please.
I propose lowering the legal age for work eligibility.
Productivity will SOAR! We can close the deficit! We'll rule the world!! MUWAHAHAHAHA!
Will some children die? Sure. But aren't those acceptable losses to regain our greatness!
USA! USA! USA!
"Anyone that makes less than $150K in this country, has no business voting Republican."
What they're really doing is constructing a system where people will return to keeping their money in a shoebox under the bed:
Sounds fine to me. I've never understood why people are so trusting with their money. I'll be damned if I give all my money over to a fucking bank. I keep enough in there to pay bills and do transactions, but anything else I keep at home.
Years back, my mom kept nagging at me to put my money into mutual funds. I resisted. Something just didn't strike me right about the idea. I didn't like the sound of locking up my money like that. And what do you know? The mutual fund industry went to hell a few years ago. I was SO FUCKING GLAD I didn't listen. (Just like I didn't listen to my dad who for years kept insisting that I had to start drinking coffee. Thanks to my stubbornness, I've never developed the nauseating addiction that pretty much everyone else has to that shit.)
There's a great deal to be said for thrift, you know. There's way too much emphasis on MAKING more money and not enough on SAVING the money one already has. Maybe if we weren't so busy chasing more bucks, we wouldn't be in the mess we're in now, eh?
There's always free cheddar in the mousetrap, baby. - Tom Waits
Unbelievable . Yeah man , this is change isn't it ? Main street over Wall Street ! Right on Barack ! Man were we ever had . It's frickin hopeless folks , outta control . I agree with Hartmann , worse is yet to come . Please beam me up Scotty , I want the hell outta here .
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