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Gary Fritz wrote:
The WSJ Sunday supplement today had some talking head (do they have those in newsprint? :-) claiming there was almost no chance of money funds "breaking the buck." Wonder what he gets paid to blow sunshine.As to amount it is almost the same, but billions with a B, even for individual companies. For Citi alone 50 BILLION.Jaezuss. I'm not sure if/how even Citi could absorb a hit like that and survive.
Some probably won't, but others will be able to work off the problems they have over time, and in the meantime they'll carry the junk on their balance sheets at overly optimistic prices so everything looks OK.
Go back and look at what most of the banks did with their fixed income portfolios when Volker drove interest rates skyward, and the real value of their older holdings dropped like a stone.
I spent the month of October bouncing all over Asia doing some work for Citi. I suspect it wouldn't have happened if they were setting it up now...He did leave the conclusion that there will be more great investment opportunities out there than there have been for generations. Soundslike the old Chinese proverb -- "May you live in interesting times."Interesting indeed. Too damn interesting. Though I would like to hear his projections on what & when those "great opportunities" will be...
Think contrary to what they say, to see what they'll actually want. Most often the pronouncements from the ivory towers are designed to make it easier for them to accomplish what they want to do themselves. A good current example is the conversation I had with Goldman. They are most likely filled up with shorts and they want me, and others, to help them drive the prices down.
Richard