Wednesday, September 16, 2009

Money market guarantee by the Fed expires in the next few days

Regarding the bid for treasuries, meaning the persistent bid for them. The money market guarantee is set to expire on Friday. The treasury action may be from people exiting money markets trying to get into "safety"...and it has got to be giving stocks a bid too as we have seen. What do they say?...too many dollars chasing too few opportunities. If that's the case, this is definitely not what real bull market rallies are built on.

The fact must be, that some people feel safer in stocks where they can lose 30% in a giffy, than in money markets where the firm can lie to you and you lose everything.

This is what happens when you play GOD like the fed/treasury have done. The confidence is NOT really there...and as soon as god takes a break, people's true mood comes out...just as Dan has been pointing out.

Notwithstanding all of that, it seems like this could become another problem for the financial system...that much cash departing money markets can not be good. I think the money markets issue also is effecting currencies...

So what's happening to the institutions that used to invest that money?...what happens to their balance sheets?

I wish I had checked this out earlier...this rally would have been much easier to conceptualize.

I smell trouble.

you can see an article about this here.
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