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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 386.44-0.2%Dec 5 4:00 PM EST
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To: energyplay who wrote (21053)8/11/2007 2:03:47 PM
From: Slagle  Read Replies (1) of 218253
 
Energyplay.
How safe are your Money Market funds? On another website, the one I told you about, there is a very interesting discussion ongoing about this subject.

A regular poster there, a bond trader, just posted an interesting story about how a very close friend, another trader, lost $15mm in a Refco MM fund years ago.

He tells the story of other guys he knows well lost money in a Drexel MM account, all of the money above the amount covered by SIPC was lost.

This guy apparently clears through Goldman and he has recently done some checking on the security of his sweep account there. He is not entirely satisfied.

Lots of this discussion is way above my head. The manner in which MM funds are operated is a very complicated business and there is apparently lots of counterparty risk with some of these funds, mainly wiht regards to the "overnight" operations. Apparently the more risky MM funds are the ones associated with some of the trading houses, and the risk is greater than just the condition of the house. THere is considerable counterparty risk, too.

I was surprised to learn how much risky stuff one of my MM funds held, so I switched to another. But if you trade, your options are limited.

Next thing to worry about?
Slagle
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