"anoop" <ghanwani[at]gmail.com> wrote in message
In general, until employment starts picking
- quote -

The unemployment rate is lower than any time during the 25 year period of
1972 - 1996, or the last full year of the Nixon administration, all of the
Ford, Carter, Reagan, Bush I administrations, and the first 4 years of the
Clinton administration. See: http://www.miseryindex.us/urbyyear.asp

Somehow it has gotten around that we have a crisis regarding employment. Not
so. Is the economy dandy? Well there are a few institutions who didn't
understand, apparently, mortgage lending and got themselves into trouble.
People were eager to buy a house and got in over their heads, because they,
too, failed to properly understand mortgage lending.

The economy doesn't always move in one direction. This, too, shall pass.

Elizabeth Richardson

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On Apr 1, 6:41 am, dapperdobbs <George...[at]hotmail.com> wrote:

- quote -

I'm not sure whether I buy the argument that the crisis is over.
Some of the blogs I read say there's more to come
(like Mish's blog). In general, until employment starts picking
up, I don't think we will have seen the end of this crisis (hence
my conservative stance to investing at this time). The fed may
have to bail a few more banks out.

Anoop

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"anoop" <ghanwani[at]gmail.com> wrote in message
- quote -

I'm saying that there is no insurance will protect you financially if
California goes bust. The effect such an occurence would have on the economy
of not just the US, but the entire world, would be catastrophic. There isn't
any insurance that protects you from making poor investments. FDIC insurance
does provide insurance in the case of a bank failure.

Elizabeth Richardson

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On Apr 1, 9:10 am, PeterL <po.n...[at]gmail.com> wrote:

- quote -

Both. It sounds like Elizabeth is saying that market
fluctuations is not an issue (since it's a MMF and CA
won't go bust). That leaves the bankruptcy issue
of the bank. I thought SIPC covers that to 500K.
Is my assumption correct?

Anoop

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On Mar 31, 8:42*pm, anoop <ghanw...[at]gmail.com> wrote:
- quote -


I think you are mixing two issues here. Safe from what? Bank
bankruptcy or market fluctuations?

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"anoop" <ghanwani[at]gmail.com> wrote in message
news:f87bb2d0-1b01-4051-89d0-293378be190a[at]m3g2000hsc.googlegroups.com...

- quote -

Really? I don't think so, at least not for Vanguard. I think this
insurance is for funds in *brokerage* accounts.

- quote -

I don't think so. Rather, I think that each individual mutual fund is a
separate corporation, so there are firewalls between the organization that
manages the fund and the fund's assets itself.

- quote -

Yes indeed.

- quote -

What's your risk profile?

For example, right now Vanguard's short-term investment-grade bond fund is
yielding 4.17% and their treasury bond fund is yielding 2.33%. So at some
point you need to decide whether the extra return is worth the extra risk.

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On Mon, 31 Mar 2008 22:20:21 -0500, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> wrote:


- quote -

Elizabeth I like your style.

As for another opinion on the thread about how to invest a friend's
$500,000, I can't remember how many times the OP mentioned that they
wanted no risk, but it was a bunch. So I vote for CDs.

(Personally I would not put $500,000 in CDs, but my job is to help the
client handle his/her money the way he/she wishes, which is not
necessarily what I would do. This OP was very clear in what he
wanted.)



-HW "Skip" Weldon
Columbia, SC

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On Mar 31, 11:06*pm, "Mark Freeland" <BnetOne...[at]sbcglobal.net> wrote:
- quote -

The crisis may in fact be over at this point. Not much discussion has
gone on in this forum about the crisis as it was unfolding, and very
little appeared in the widely-distributed media PRIOR to the crisis.
(A number of non-media papers and analyses were available prior to the
crisis (one link to an article written by an official of Fannie Mae
was posted in this forum way back in early 2005), but you had to look
and dig to find them.)

- quote -

Mark, I believe a preceding discussion regarding CD's and the FDIC
arrived at the determination that CD's held at ONE bank can and should
and usually are CD's from OTHER banks, thereby gaining FDIC insurance
for each CD - even if the total at one's preferred bank exceeds the
100k limit. I.e. it is not necessary to open separate accounts for
CD's. One can also purchase Treasury bills through one's bank.

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On Mar 31, 10:20 pm, "Elizabeth Richardson"
<erich...[at]worldnet.att.net> wrote:
- quote -

Very well said, as so many municipalities are realizing, it's easier
and cheaper to publish and stand on their sound financial position
than it is to purchase insurance some have called "worthless."

The appraisal and management of so-called "risk" is so awfully,
horribly, abysmaly warped these days that municpal tax-free rates are
higher than taxable Treasury rates.

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"Mark Freeland" <BnetOnewsX[at]sbcglobal.net> writes:

- quote -

I have read that this is the one scenario in which Vanguard's
unique ownership structure (Vanguard's funds basically collectively
own Vanguard) is a negative -- because of the structure, Vanguard
cannot kick in money to prevent a MMF from breaking a buck.

--
Rich Carreiro rlc-news[at]rlcarr.com

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"anoop" <ghanwani[at]gmail.com> wrote in message
news:f87bb2d0-1b01-4051-89d0-293378be190a[at]m3g2000hsc.googlegroups.com...
- quote -

That is not correct. Shareholders lose everything, but creditors get to
divide the assets. From the FDIC's FAQ:
"The amount of uninsured deposits they may receive, if any, is based on the
sale of the failed bank's assets. Depending on the quality and value of
these assets, it may take several years to sell the assets. As assets are
sold, uninsured depositors receive periodic payment on their uninsured
deposit claim."

- quote -

The insurance is to protect investors against the custodian running away
with the assets.
http://www.sipc.com/how/involved.cfm

Since mutual funds (including money market funds) are separate companies
from the fund management and fund distributor companies (aka fund families),
the fact that a fund family goes bust has no effect on the fund (technically
an investment company).

FWIW, money market fund shares are securities, not cash.

- quote -

Yes, but the industry as a whole has such a strong impetus to prevent losses
in MMFs (by paying out of their own pockets, if necessary), that the fund
families are virtual insurers of the money market funds.

- quote -

Given the level of world-wide faith in the dollar (as suggested by
$1.58/euro), this is a better alternative?

If you have faith in the federal government, and you've got several hundred
thousand in cash just lying around (a problem we should all have), you can
split your stash of cash into accounts at different banks, each with a $100K
insurance limit. Note that retirement accounts are protected to $250K.

Mark Freeland
BnetOnewsX[at]sbcglobal.net

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On Mar 31, 8:20 pm, "Elizabeth Richardson" <erich...[at]worldnet.att.netwrote:
- quote -

Are you saying its pretty safe to have millions
of dollars sitting in these funds at Vanguard/Fidelity?
It sounds like you regard these funds as having a
lower risk than regular bank deposits, and yet these
funds tend to have higher returns.

Anoop

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"anoop" <ghanwani[at]gmail.com> wrote in message

- quote -

If the State of California goes bust, we've got more problems than any
federal deposit insurance will fix.

Elizabeth Richardson

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With the Bear Stearns fiasco, no bank seems
secure. So...

When depositing money with a regular bank that
has FDIC insurance up to 100K, if the bank declares
bankruptcy, I assume the account holder loses everything
above 100K. Is that correct? So the way to protect
oneself is to spread the money across accounts
with < 100K in each.

Likewise, Fidelity and Vanguard have their own
"cash reserves" fund. The monies in their accounts
are insured by the SIPC to 500K (100K for cash
claims). So I assume that's where the account holder
goes if Vanguard/Fidelity goes bust. But then, with
these accounts there's also the added risk that the
fund share itself lose money because of defaults, right?
For example, if one has invested in VCTXX, then
one could lose part of that money if the state of
CA goes bust, right? What can one do in this
scenario? Just stick with treasury funds?

Anoop

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