Money Markets Not Federally Insured?
Yes, I almost wept when I read this too. For some reason, I guess I thought that since the majority of money market funds are invested in FDIC insured banks and financial institutions, that in the event of a major market meltdown, my money market fund would be protected by the federal government for deposits up to $100,000, just like it is with FDIC insured banks and financial institutions, in case they go bankrupt.
However, upon reading a little more after getting the typical jitters in an unstable market, I did find that a lot of investors think the same way I do, or at least their actions would seem to dictate this, since by the end of August 2007, money markets saw a serious surge in their funding, with investors that may have been nervous about investing in mutual funds, which are largely invested in the general markets, moved their money over to money markets. I thought, oh no, does that mean we’re in even bigger trouble if our money markets happen to go bust?
It seems that my worrying may be of no avail though, after further reading that the biggest financial institutions are still on solid ground, and doing just fine. I guess this means my money markets are supposedly safe? I guess there are no guarantees on anything these days in these financially uncertain times and people saying the ugly word “recession” over and over.
The housing market certainly isn’t helping, but I read with relief that most of the foreclosures are foreclosures on prospectors, those that were buying and flipping houses for profit. Guess that’s not such a good business to be in right now, with buyers edgy and home sales still in the dumper, but I didn’t realize that such a large percentage of these foreclosures came from home flippers, or prospecters.
I knew the idea of buying and selling homes for profit had become the next big thing in making people millionaires, and many thought it would be their financial salvation. Could this surge in home buying and selling have inadvertently really screwed up the housing market? What about all the new homes being built by popular builders now? Could that have contributed to this mess as well?
