Are Things About To Get Ugly?
Posted on June 29th, 2011 by MoverMike
Jim Sinclair alluded to it yesterday at JS Mineset when he wrote:
Please note: money market funds are experiencing increased withdrawals. This could be dangerous.
Why? Marc Chandler who is the head of global currency strategy at Brown Brothers Harriman notes that short-term commercial paper is mostly purchased by money market funds. Ten of the top 15 issuers of such short-term paper are European banks and Moody’s estimates that of over half of that is accounted for by Frenchbanks. Moody’s just placed 3 French banks on review for a possible downgrade.
The result is money fleeing to strictly US Treasury or US high grade money market funds. Chandler likens the European troubles as a contagion that is coming to America.
Discussion Area - Leave a Comment