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For the lazy there are prime money market funds. In this panic and the '08 panic, the Treasury/Fed stepped in to protect prime funds. It's not fair to people
by rmrfstar 6y ago
For the lazy there are prime money market funds.
In this panic and the '08 panic, the Treasury/Fed stepped in to protect prime funds.
It's not fair to people who buy government funds, or jump through hoops to spread cash across banks. But that's what they do.
- mrep 6y ago> It's not fair to people who buy government funds Are you suggesting our government should prioritize investors who buy government bonds over its own citizens (who at least in theory, would have to pay for those bonds in the future with taxes)?
- rmrfstar 6y agoNo. I am saying that money market funds that buy short-term treasuries ("government funds") have the same level of safety as insured deposits. Because of this safety, they have lower yields than prime funds which invest in unsecured short-term corporate debt. It is unfair to the careful people who invest in government funds to bail out prime fund investors every time it looks like they might lose 0.5-1%.
- mrep 6y ago> It is unfair to the careful people who invest in government funds to bail out prime fund investors every time it looks like they might lose 0.5-1%. Can you explain this more? How are they bailing out prime fund investors?