2 min readExecutive Summary The FSP, ARRA, and the flurry of new programs and details in February may not provide the immediate shot in the arm financial markets were looking for, but some of the programs should have substantive, long-lasting positive attributes that could certainly provide a tug in the right direction in the current credit market…
2 min readOver the course of the past year there have been a slew of government programs developed to prop up the credit markets and spur economic growth. The programs have had various impacts, from stabilizing money market fund flows, to providing liquidity support for certain asset classes and direct credit support for certain targeted credits. Still,…
2 min readExecutive Summary As risk averse cash investors slowly move away from an aggressively conservative strategy, we take a look at two developing trends that investors may be considering and some potential pitfalls. Emerging Trends: Bank Deposit Accounts Prime Money Market Funds We think that the credit market has probably exited the free-fall phase and has…
2 min readEmerging signs of stabilization in the credit markets, while a welcome sign, should not result in complacency among corporate cash investors. Risk levels are still elevated in several cash investment sectors and the recent government bailout and restructuring of CitiBank demonstrate that surprises in the banking sector are likely not over. And while Citi’s “too…
2 min readThere’s a very good chance that future generations will look back upon 2008 and remember it as the year of this century’s most alarming financial meltdown, on par with the crash of 1929. With the benefit of hindsight, it’s very likely the Fed action through the end of 2008 will be critically viewed and some…
2 min readExecutive Summary A. Recent market turmoil uncovered rising systemic risks among money market funds: Regulatory rules failed to adequately address investment risks Defending the constant $1 share value became more difficult Money funds as commingled vehicles have inherent drawbacks B. Key factors in money market fund selections: Focus on the wherewithal of the funds’ sponsors…
3 min readRecent credit market events have stress-tested corporate cash portfolios more than at any time I can recall in my 28-year investment career. These events are shocking in scope and have threatened our financial system in ways not seen since the Great Depression. Because it’s so easy to “lose sight of the forest” in this unprecedented…
2 min readSince August 17, 2007 there have been more than 40 separate measures announced by the Fed and Treasury designed to stabilize the credit markets. The most recent programs follow a similar remediation course to that of past credit bubbles that required direct government investment in banks and deposit guarantees by sovereign governments. These recent measures,…
6 min readRecent credit market events have stress-tested corporate cash portfolios more than at any time I can recall in my 28-year investment career. These events are shocking in scope and have threatened our financial system in ways not seen since the Great Depression. Because it’s so easy to “lose sight of the forest” in this unprecedented…
3 min readIn light of this week’s failed vote on the Troubled Asset Relief Program (TARP), we wanted to share some credit considerations with you. Companies may want to evaluate non-2a-7 bank money market deposit accounts (MMDA’s) with balances greater than $100,000, the FDIC coverage limit per bank (the FDIC insurance limit may increase to $250,000 if…