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This is an important distinction. When the money marketeer redeems a dollar for less than a dollar it "Breaks the Buck" [0]. Cowen's MM account IIRC was the f
by howard941 8y ago
This is an important distinction. When the money marketeer redeems a dollar for less than a dollar it "Breaks the Buck" [0]. Cowen's MM account IIRC was the first one to do that back during the 01 crash.
[0] https://www.investopedia.com/terms/b/breaking-the-buck.asp https://www.investopedia.com/terms/b/breaking-the-buck.asp
- xxpor 8y agoThe rules around breaking the buck were significantly changed after 08. Funds can suspend transactions instead now.
- theseatoms 8y agoAs if not letting people out is better than letting them out at a haircut. Need to maintain the illusion of safety I suppose.
- xxpor 8y agoYeah. And the haircut is usually quite small. If I sold my money market for 98 cents on the dollar in a financial crisis I really wouldn't be that upset.