More money market messes
Problems in the credit market seem to have infected an institutional money market fund run by Bank of America’s (BAC) Columbia Management. Money market observer Crane Data reports that Columbia Funds Strategic Cash has halted redemptions after the fund’s assets fell to $33 billion from $40 billion after a run of redemptions. Crane says the fund in question is an enhanced cash pool available to only the largest qualified institutional investors. A call to Columbia wasn’t immediately returned.
At Naked Capitalism, Yves Smith points out that no investors are known to have lost money, though he notes that BofA previously pumped $300 million into the fund. A report about the redemption halt on CNBC took Bank of America stock down a bit, though the banks and brokerages are still rising on the heels of Monday’s capital infusions at UBS (UBS) and MBIA (MBI).
I don’t want to pay off my mortgage, car payments, or credit cards - how do I get a cash infusion to take care of this? Am I allowed to just ‘refuse to pay’?
Anyone who trusted Bank Of America with their money probably deserves this, and they won’t make the same mistake twice.
I’d be very interested in understanding the implications of this situation.
This isn’t 1929, you can’t halt redemptions. If people or institutions want their money, it’s theirs to take. This is ridiculous.
Stock market is rising on basis of central bank cash infusions. Wonderful. That money was supposed to help the economy, not make Wall Street gamblers even richer while covering up all their mistakes and crimes. This situation with central banks counterfeiting vast sums to hand out to their relatives and friends is going to end in disaster.
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This is serious, if they are halting redemptions it could be the tip of the iceberg, I remember when Enron did this, they were insolvent in a matter of days, this is actually BIG news, GET OUT OF B OF A ASAP