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DantesPeak
Expert
Joined: Oct 23, 2004
Posts: 5928
Location: New Jersey
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 Posted: Tue Sep 16, 2008 9:45 pm Post subject: Re: Will the world economy collapse Wednesday? |
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A new actor takes the stage, "no money for you", he says:
| Quote: | Money market breaks the buck, freezes redemptions
Reserve Primary Fund stung by Lehman collapse, investor withdrawals
NEW YORK (MarketWatch) -- One of the original and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."
While Primary Fund's Lehman holding was small compared to the fund's overall size, the fact that it froze redemptions reflects a surge in redemption requests by investors.
The size and speed of the withdrawals was stunning. At 3 p.m. on Tuesday, Primary Fund's assets stood at $23 billion, a $40 billion hit from the $62.6 billion in the fund on Friday, a spokeswoman for The Reserve told MarketWatch late Tuesday.
"Effective today and until further notice, the proceeds of redemptions from The Primary Fund will not be transmitted to the redeeming investor for a period of up to seven calendar days after the redemption," The Reserve said in a prepared statement. |
Marketwatch
In this case it paid to panic first, and beat the rush.
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It's already over, now it's just a matter of adjusting. |
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AirlinePilot
Moderator
Joined: Apr 05, 2005
Posts: 2616
Location: South of Atlanta
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| Posted: Tue Sep 16, 2008 10:03 pm Post subject: Re: Will the world economy collapse Wednesday? |
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Crap! I have a lot of cash and money market type holdings at the moment in the 401K and a few other places. This is not news Ive been wanting to hear.
It spells the next round of fear taking hold. When the doomer news stories play for long enough folks will start a run on the banks and their assets.
Not good, not good at all. |
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Ache
Heavy Crude
Joined: Apr 23, 2005
Posts: 263
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Jotapay
Intermediate Crude
Joined: Jun 21, 2008
Posts: 675
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| Posted: Tue Sep 16, 2008 10:24 pm Post subject: Re: Will the world economy collapse Wednesday? |
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| AirlinePilot wrote: | Crap! I have a lot of cash and money market type holdings at the moment in the 401K and a few other places. This is not news Ive been wanting to hear.
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WTF are you thinking? Food, PMs, cash, ammo, land. |
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jbrovont
Intermediate Crude
Joined: Jun 16, 2006
Posts: 701
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| Posted: Tue Sep 16, 2008 10:30 pm Post subject: Re: Will the world economy collapse Wednesday? |
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Cash out man. No point in taking the granade on this one.
| AirlinePilot wrote: | Crap! I have a lot of cash and money market type holdings at the moment in the 401K and a few other places. This is not news Ive been wanting to hear.
It spells the next round of fear taking hold. When the doomer news stories play for long enough folks will start a run on the banks and their assets.
Not good, not good at all. |
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karras
Tar Sands
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Joined: Jul 28, 2008
Posts: 23
Location: New York, NY
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| Posted: Wed Sep 17, 2008 12:51 am Post subject: Re: Will the world economy collapse Wednesday? |
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| The irony of all this is that a system was created that punished those who followed Finance 101 and rewarded those that ignored it and followed GREED. Now, we all pay for it. I just hope that people dont make a "run on the banks". As noted earlier in this thread, the FDIC has no hope of insuring even a significant fraction of its obligations. This is a situation in which The Second Great Depression could begin overnight. |
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Novus
Light Sweet Crude
Joined: Jun 21, 2005
Posts: 1750
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| Posted: Wed Sep 17, 2008 4:45 am Post subject: Re: Will the world economy collapse Wednesday? |
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Someone doesn't like the bail out and it is not just the US tax payer. There seems to be a run on the bank with AIG Singpore.
If this spreads $85 Billion won't be enough. On Sunday AIG needed $40 billion to stay solvent. By Tuesday morning the number swelled to $75 billion. Hours later another $10 billion had to be tacked on to keep the company afloat. Things continue to deteriorate at AIG as untold $ billions more are now being called for to cover the policy runs. AIG is leveraged 100 to 1 so every time some pulls $1 then AIG has to deleverage $100. So if a $1 billion in policies were called in then AIG has to cover $100 billion. Bush and FEDS just tossed $85 billion into a black hole and still this abyss beckons for more.
Stick a fork in AIG and be done with it and stop wasting tax payer money trying to catch a falling dagger. |
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VMarcHart
Light Sweet Crude
Joined: May 26, 2008
Posts: 1190
Location: Chicago, IL
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| Posted: Wed Sep 17, 2008 5:52 am Post subject: Re: Will the world economy collapse Wednesday? |
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| Quote: | | Will the world economy collapse Wednesday? |
Doubtfully. There is a tendency of proclaiming the worst. I think it will be more of a prolonged soft crash, ie, months if not years of endless correction. |
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shortonoil
Fission
Joined: Dec 02, 2004
Posts: 2752
Location: VA USA
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| Posted: Wed Sep 17, 2008 7:06 am Post subject: Re: Will the world economy collapse Wednesday? |
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VMarcHart said: | Quote: | | Doubtfully. There is a tendency of proclaiming the worst. I think it will be more of a prolonged soft crash, ie, months if not years of endless correction. |
I wish that I could find one shred of evidence to help me share in your optimism. Unfortunately, there doesn’t seem to be any! |
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Heineken
Expert
Joined: Sep 14, 2004
Posts: 6627
Location: Rural Virginia
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| Posted: Wed Sep 17, 2008 7:36 am Post subject: Re: Will the world economy collapse Wednesday? |
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| alpha480v wrote: | | Kudlow and company just announced AIG will be given an 85 billion fed bridge loan. |
But will it be a Bridge to Nowhere? I've had enough of this; I'm bugging out to my tree farm for a couple of days.
Ta-ta, folks.
_________________
"Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother |
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Specop_007
Expert
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Joined: Aug 12, 2004
Posts: 6288
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| Posted: Wed Sep 17, 2008 7:41 am Post subject: Re: Will the world economy collapse Wednesday? |
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| Heineken wrote: | | alpha480v wrote: | | Kudlow and company just announced AIG will be given an 85 billion fed bridge loan. |
But will it be a Bridge to Nowhere? I've had enough of this; I'm bugging out to my tree farm for a couple of days. Ta-ta, folks. |
Enjoy the vacation! 
_________________
"Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
كا&# |
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VMarcHart
Light Sweet Crude
Joined: May 26, 2008
Posts: 1190
Location: Chicago, IL
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| Posted: Wed Sep 17, 2008 8:29 am Post subject: Re: Will the world economy collapse Wednesday? |
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| shortonoil wrote: | VMarcHartsaid: | Quote: | | Doubtfully. There is a tendency of proclaiming the worst. I think it will be more of a prolonged soft crash, ie, months if not years of endless correction. |
I wish that I could find one shred of evidence to help me share in your optimism. Unfortunately, there doesn’t seem to be any! |
Alas, I don't have scientific evidence or otherwise. It's the proverbial pinky, if you will. I'm a doomer, but just to an extend. World economy collapse by EOB today? No way! We have enormous amount of financial fat to cut until it happens. The US economy has been flat for 8 years; soon a decade. What do people mean by "collapse"? |
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Jotapay
Intermediate Crude
Joined: Jun 21, 2008
Posts: 675
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| Posted: Wed Sep 17, 2008 8:33 am Post subject: Re: Will the world economy collapse Wednesday? |
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| Breaking news, the Fed is out of money. Treasury to sell T Bills. Gold shoots up a bit. |
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retiredguy
Intermediate Crude
Joined: Jan 11, 2005
Posts: 580
Location: southern Wisconsin
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| Posted: Wed Sep 17, 2008 8:36 am Post subject: Re: Will the world economy collapse Wednesday? |
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I think a run on the banks and that aftermath could serve as a definition for "collapse."
This a a faith-based system. There aren't enough real dollars to back all of this debt. |
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VMarcHart
Light Sweet Crude
Joined: May 26, 2008
Posts: 1190
Location: Chicago, IL
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| Posted: Wed Sep 17, 2008 8:57 am Post subject: Re: Will the world economy collapse Wednesday? |
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| retiredguy wrote: | | I think a run on the banks and that aftermath could serve as a definition for "collapse." This a a faith-based system. There aren't enough real dollars to back all of this debt. |
A run on the banks would be horrible indeed, and that would be a collapse. By EOB today? No way. Besides, it would just create panic and get the economy even more out of tracks. |
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