Monday, December 22, 2008
This will be my last post for the week. Despite my suggestions, Christmas was not canceled this year. The markets are trading very thin at this time of the year, and trying to determine direction most likely fruitless. LOL, as if the past 9 months have offered any opportunity to determine direction. Persistence in our cause will pay-off. Step away from the markets now, and enjoy the Holiday Season with me. Be safe, be honest, and be thankful. See you all back here next week.
Money market funds reel as yields near zero
Money market funds, an increasingly popular place to park cash, will need to raise fees or close to new money to remain profitable as yields hover at near-zero, according to industry managers.
The cost of running money market funds is greater than the fees charged. Usually, the difference is not great, and the funds are able to pick up profit on excess yield.
However, the gap between costs and fees has widened, and yields have plummeted. The average yield on a Treasury retail fund was 0.34 per cent at the end of November, compared with 2.9 per cent last December, according to iMoneyNet, an industry tracker. About one in 10 money funds yields nothing.
Mr McDonald said: “Our Treasury fund yield was net 50 basis points after investor fees, and our expense is 47 basis points. If assets remain unchanged and we continue to roll over securities, our fund will run out of yield in February.
Where'd the bailout money go? Shhhh, it's a secret
WASHINGTON – It's something any bank would demand to know before handing out a loan: Where's the money going?
But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it.
The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?
None of the banks provided specific answers.
Some banks said they simply didn't know where the money was going.
There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money — not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that's happening and there are no consequences for banks who don't comply.
"It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry," said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.
But, at least for now, there's no way for taxpayers to find that out.
AP study finds $1.6B went to bailed-out bank execs
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.
The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.
Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.
The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.
John Embry: U.S. calls tune as gold, silver plunge
Sprott Asset Management's John Embry writes in detail about the gold price suppression scheme in his latest essay for Investor's Digest of Canada. It's headlined "U.S. Calls the Tune as Gold, Silver Plunge" and you can find it in PDF format at the Sprott Internet site here: