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To: LLCF who wrote (183773)	7/26/2002 12:42:00 PM
From: stan_hughes	Read Replies (1) \| Respond to of 436258

LLCF - Don't know that's it's ever been legally tested, but it shouldn't matter in practice. Barring defalcation (unlikely), considering the restrictions on what MMFs hold, you would need (a) a horrendous concentration in a non-government defaulter or (b) widespread unremedied government defaults in order to generate any kind of a hit worth fretting about. And if the government goes down, I wouldn't sweat being compensated in dollars for losses in your MMF, I'd be in the hills cleaning my gun

To: LLCF who wrote (183773)	7/26/2002 12:55:12 PM
From: stan_hughes	Respond to of 436258

LLCF - Here's a blurb on MER's product. Take note: "Account protection for the full net equity account value in excess of Securities Investor Protection Corporation2 (SIPC) limits for cash and securities held by Merrill Lynch, including all CMA money market funds" but that is subject to the following disclaimer "Investments in the money market funds are not insured or guaranteed by the FDIC or any other government agency. Although the funds seek to preserve the value at $1 per share, it is possible to lose money by investing in the funds" My other comments about the practicalities of eating losses on MMFs still stands businesscenter.ml.com

To: LLCF who wrote (183773)	7/26/2002 2:12:55 PM
From: Joan Osland Graffius	Respond to of 436258

LLCF, Looks like you got a ton of reaction on you MM fund inquiry. I had looked into Morgan Stanley MM fund that is a default for their brokerage accounts. It is called "liquid asset fund". This fund had 15% telecom debt. <g> If the account goes under a dollar in value and if Morgan Stanley management decides to not invest their capital in the fund to shore it up - it will drop par value to less than a dollar. In the back of my mind if things get real bad this could be the equivalent of the run on the banks in the 30's. Some of the Japanese Banks I think it was last year let their MM funds drop par value because of the Enron debt. I rotate treasuries and CD's out in time (right now 9 month rotation) and I do use Merrills Banking Advantage (FDIC insured) for day to day cash flows. Joan