Panic selling shuts $4bn fund

It seems that more "fund run" are going on world wide: "Panic selling shuts US$4bn fund: Scottish Equitable acts after slump." With 129K investors, that works out to be an average of $31K per person.

Copyright 2008, DannyHSDad, All Rights Reserved.

Fund Run: Montana and Florida

"Montana fund sees $247 mln of withdrawals: Florida's investment woes spark subprime fears in other states"

and

And update on Florida's (LGIP) fund: "Florida Halts Withdrawals From Local Investment Fund (Update3)"

So, will this turn into fund run across US (and other countries)? The mind boggles...

Copyright 2007, DannyHSDad, All Rights Reserved.

Fund Run: Municipals losing money and pulling out of funds

It seems that runs are starting on funds at least at the state level:

1. Florida School Fund Rocked by $8 Billion Pullout -- turns out some State funds were invested in SIV's which have lost money in the last few months. So local governments pulled out and those who are still in it may not get back their principle!
2. Maine Treasurer Criticizes Merrill for Subprime Bet -- seems that ML lead them astray and made Maine lose money.
3. Caisse de Depot Has C$13.2 Billion Invested in Commercial Paper -- Canada's biggest pension fund manager also has C$1 Billion in subprime loans.
4. As towns go broke, subprime crisis hits Arctic Circle -- "A Norwegian brokerage that lost its license over its role in turning four remote towns around the Arctic Circle into victims of the U.S. subprime crisis said Wednesday that it would file for bankruptcy."
   

What a nice bunch: all blaming the US subprime "problem."

Copyright 2007, DannyHSDad, All Rights Reserved

Run on the Funds

CR has been covering the fund issues, like "GE Bond Fund Breaks the Buck" which isn't about a money market fund (MMF) but is supposed to be similar to a MMF. Unfortunately, with the higher returns, you have to take higher risk and in this case, the risk resulted in a slight loss.

In similar vein, MarkeWatch has "Is your MMF safe? (Mounting concern about money-market funds: Investments seen as safe and secure face threat from bad debt holdings)." Some funds are suffering and companies have had to provide some support to prevent the funds from "breaking the buck." For example, Bank of America announced that it will pour in $600 million to prop up some funds.

Copyright 2007, DannyHSDad, All Rights Reserved.