Not a day goes by anymore without another startling revelation about this sub prime mortgage banking mess. Treasury Secretary Paulson seems to think he has answers, but what was his involvement while at Goldman Sachs? We may never know.
What we do know is that housing prices are falling, banks are taking HUGE write offs and laying people off (a nice word that means they were fired) and the financial markets are in turmoil. One lender cut its dividend to shareholders a whopping 73% and UBS, after telling shareholders just 3 weeks ago not to expect huge write downs in the 4th quarter, just wrote off $10 Billion. Maybe management doesn’t consider that big?
The question is “what do YOU do about it”. You need to know where your money is safe, and where to put it if it isn’t. You also need a place for you to be safe. Those answers you are likely to find in Casey’s Without Borders.
How about your money market funds? Are they safe? There is a lot of talk about the possibility of money market funds “breaking the buck”, meaning that their value would go below the target, not guarantee, of $1.00 per share. Are you in a money market fund that pays better than most others? Then you have to wonder what they have invested in to get that extra return. Typically, it’s something more risky – like sub prime paper!
In the crazy quilt that the financial world has become, people are asking what if anything will come of our beloved Bush administration’s proposed sub prime bailout, and whether even their money market funds are safe. Both of those questions are addressed in the upcoming issue of another Casey Research project – BIG GOLD. Check it out.
