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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: forceOfHabit who wrote (85010)	8/14/2007 10:14:51 AM
From: orkrious	Read Replies (4) \| Respond to of 110194

from Doug Kass: thestreet.com As I recently warned, the next shoe to drop will be the fear and then actual losses in money market funds. In their grasping for yield, many money market funds -- including BlackRock (BLK), Charles Schwab (SCHW) and Fidelity (FSBI) -- attempted to enhanced their investment returns by purchasing low-quality debt instruments (collateralized debt obligations, continuous linked settlements, mortgage-backed securities, etc.). And many of those money market funds -- like the hedge funds that invest in them (particularly futures funds, which typically keep large cash positions) -- have yet to mark to market, or if they have, in certain cases have halted redemptions. Yep, that's correct: Money market fund management companies have begun to halt redemptions. In fact, here is one example of a management company that has halted redemptions. Despite the protestations of bullish ostriches, their heads remain firmly entrenched in the sand. The credit backdrop is getting more and more murky. Resist those who suggest that there is value in the equity market; they may very well be right, but in this environment, the evolving credit risks don't seem to justify the risks in longer-dated assets like equities.