Credit Bubble Bulletin, by Doug Noland

[davelj]

Well, looks like I was wrong, and it won’t be the last time. Today looks pretty prosaic for the stock market so far. And it’s up, so I was wrong on both counts – it’s up and not particularly volatile. That’s about par for the course. Another good example of why I don’t fool around with public securities.

Should be an interesting week…

[davelj]

Well, looks like I was wrong, and it won’t be the last time. Today looks pretty prosaic for the stock market so far. And it’s up, so I was wrong on both counts – it’s up and not particularly volatile. That’s about par for the course. Another good example of why I don’t fool around with public securities.

Should be an interesting week…

[Carlsbadliving]

He mentions risks to money market funds. What are the risks to these? I transferred most my funds to a money market last year and assumed it was pretty safe.

[Carlsbadliving]

He mentions risks to money market funds. What are the risks to these? I transferred most my funds to a money market last year and assumed it was pretty safe.

[Carlsbadliving]

He mentions risks to money market funds. What are the risks to these? I transferred most my funds to a money market last year and assumed it was pretty safe.

[Navydoc]

Ex-SD do you really believe that those $1M plus properties are immune from the bubble burst? When I look through the SD listings it seems I’m finding huge reductions in this segment particularly. Considering how many of these properties exist in areas like 4S Ranch and Rancho Bernardo, among others, how many people can afford a house like that with 10-20% down and a 30yr fixed rate mortgage?

I’m so glad I’m finally not going to look like an idiot for not paticipating in this mess.

[Navydoc]

Ex-SD do you really believe that those $1M plus properties are immune from the bubble burst? When I look through the SD listings it seems I’m finding huge reductions in this segment particularly. Considering how many of these properties exist in areas like 4S Ranch and Rancho Bernardo, among others, how many people can afford a house like that with 10-20% down and a 30yr fixed rate mortgage?

I’m so glad I’m finally not going to look like an idiot for not paticipating in this mess.

[Navydoc]

Ex-SD do you really believe that those $1M plus properties are immune from the bubble burst? When I look through the SD listings it seems I’m finding huge reductions in this segment particularly. Considering how many of these properties exist in areas like 4S Ranch and Rancho Bernardo, among others, how many people can afford a house like that with 10-20% down and a 30yr fixed rate mortgage?

I’m so glad I’m finally not going to look like an idiot for not paticipating in this mess.

[CMcG]

I’m with Carlsbadliving. Can anyone answer his/her question? Sold off a lot of stock a few weeks ago and put the cash in what my broker called “a very safe” money market fund.

[CMcG]

I’m with Carlsbadliving. Can anyone answer his/her question? Sold off a lot of stock a few weeks ago and put the cash in what my broker called “a very safe” money market fund.

[CMcG]

I’m with Carlsbadliving. Can anyone answer his/her question? Sold off a lot of stock a few weeks ago and put the cash in what my broker called “a very safe” money market fund.

[Anonymous]

With regard to money markets: The big kicker is that they are pretty much like a stock. So, they run the risk (how much risk is debatable) of losing value. Now, if the money markets that you have are invested in mortgage backed securities or related instruments, then your exposure to a risky market could be much greater than you intended. Traditionally they are viewed as low-risk. They are also very liquid.

(This will explain it better than I can: http://banking.about.com/od/investments/a/moneymarketfund.htm)

If you compare them to cd’s for example, the cd, while having a fixed term, is still FDIC insured up to 100k. To simulate liquidity, people can invest in cd’s in different terms. So, they could have a 3, 6, and 9 month cd and as each one comes to maturity, roll it into a new one – so the 3 month would go to a 9 month etc… You can have cd’s with different banks so as not to go over the 100k insurance too.

I’m no investment adviser, so if someone with more knowledge wants to jump in, please feel free.

[Anonymous]

With regard to money markets: The big kicker is that they are pretty much like a stock. So, they run the risk (how much risk is debatable) of losing value. Now, if the money markets that you have are invested in mortgage backed securities or related instruments, then your exposure to a risky market could be much greater than you intended. Traditionally they are viewed as low-risk. They are also very liquid.

(This will explain it better than I can: http://banking.about.com/od/investments/a/moneymarketfund.htm)

If you compare them to cd’s for example, the cd, while having a fixed term, is still FDIC insured up to 100k. To simulate liquidity, people can invest in cd’s in different terms. So, they could have a 3, 6, and 9 month cd and as each one comes to maturity, roll it into a new one – so the 3 month would go to a 9 month etc… You can have cd’s with different banks so as not to go over the 100k insurance too.

I’m no investment adviser, so if someone with more knowledge wants to jump in, please feel free.

[Anonymous]

With regard to money markets: The big kicker is that they are pretty much like a stock. So, they run the risk (how much risk is debatable) of losing value. Now, if the money markets that you have are invested in mortgage backed securities or related instruments, then your exposure to a risky market could be much greater than you intended. Traditionally they are viewed as low-risk. They are also very liquid.

(This will explain it better than I can: http://banking.about.com/od/investments/a/moneymarketfund.htm)

If you compare them to cd’s for example, the cd, while having a fixed term, is still FDIC insured up to 100k. To simulate liquidity, people can invest in cd’s in different terms. So, they could have a 3, 6, and 9 month cd and as each one comes to maturity, roll it into a new one – so the 3 month would go to a 9 month etc… You can have cd’s with different banks so as not to go over the 100k insurance too.

I’m no investment adviser, so if someone with more knowledge wants to jump in, please feel free.

[Carlsbadliving]

Thanks for the help. I’ll be contacting my broker tomorrow to get more info on my particular money market fund.

[Author]

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