break the buck Concepts

Empire of the Fund: The Way We Save Now

by William A. Birdthistle · 15 May 2016 · 375pp · 106,189 words

be devastated if that fund turns out to be, for instance, the Reserve Primary Fund. Sure, that fund ended up losing only a little after breaking the buck—but its failure illustrates the risk. And litigation froze the fund for over a year. For those investors disciplined enough to pour their entire

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that disguised the danger of these investments. Sooner or later, someone was going to step on this flimsy sheet and fall into the hole beneath. Breaking the Buck From time to time, money market funds encountered some difficulties. Even though Rule 2a-7 obliged advisers to invest only in conservative loans, sometimes

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on the dollars—is said to have “broken the buck.” In the first thirty-seven years of their existence, only one money market fund did break the buck. This small municipal fund ran into trouble when some of its investments failed, but the loss was minor and the rarity of the event

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the funds’ investment advisers. When portfolio loans went bad and jeopardized a fund’s NAV, these advisers poured enough money into the funds to avoid breaking the buck. These near-misses never made headlines, however, and the sense that money market funds were secure persisted. Then something truly awful happened. The Credit

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$785 million certainly was too large a loss for the fund’s adviser to cover out of its own pocket and more than enough to break the buck at that time. Many months later, after the unwinding of Lehman, this loan did generate partial returns to the fund—but only long after

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.R. § 270.2a-7 (2005). 10.In 1994, the Community Bankers U.S. Government Fund—an institutional fund—became the first money market fund to break the buck, falling to ninety-six cents per share. See David Evans, Unsafe Havens, Bloomberg Markets, broadcast, Oct. 2007, at bloomberg.com/apps/news?pid=nw

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billion, a $40 billion hit from the $62.6 billion in the fund on Friday,” in Money Market Breaks the Buck, Freezes Redemptions, MarketWatch, Sept. 17, 2008, at www.marketwatch.com/story/money-market-fund-breaks-the-buck-freezes-redemptions. 15.S.E.C. Plan to Distribute Money Fund Is Accepted, N.Y. Times

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, 75, 90–91, 115, 146 MFS. see Massachusetts Financial Services MIT. see Massachusetts Investors Trust Moby Dick, 41 money market funds accounting rules, 195–197 breaking the buck, 197–201 financial crisis of 2008 and, 191–192 operation, 190–202 regulatory response, 201–202 run, 199–200 systemic risk and, 200–201

Cryptoeconomics: Fundamental Principles of Bitcoin

by Eric Voskuil, James Chiang and Amir Taaki · 28 Feb 2020 · 365pp · 56,751 words

are typically insured by the taxpayer, more tightly regulated by the state, and accounted for as bank credit. It is rare for a MMF to “break the buck ” [541] but of course it can and does happen. Bank failures also happen but are hidden by taxpayer insurance. Bank credit is not truly

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] . The distinction is in the allocation of insufficient reserve (negative rate of return), with the former being “first come, first served ” [675] and the latter “breaking the buck ” [676] . The lack of state intervention is the common concept of free banking [677] , where there is no statutory control [678] , state insurance [679

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better

by Andrew Palmer · 13 Apr 2015 · 280pp · 79,029 words

it. For many, investing in a money-market fund is also a bet on a promise, but this time by a private actor not to “break the buck”—in other words, to give a dollar back for each dollar invested. These new products may look like the old ones, in other words

House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It From Happening Again

by Atif Mian and Amir Sufi · 11 May 2014 · 249pp · 66,383 words

house prices falling more than 10 percent. During the financial crisis, people investing in money-market funds may have believed that no fund could ever “break the buck,” or pay back less than the nominal amount put in the account. Obviously, such neglect leads investors to make systematic mistakes and exercise poor

Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe

by Gillian Tett · 11 May 2009 · 311pp · 99,699 words

4:00 p.m. New York time today.” That threatened to spark more panic. America’s money-market fund industry had prided itself on never “breaking the buck,” and the Reserve had just done so. A run on the money-market funds now seemed likely. Meanwhile, as Steven Black and Vikram Pandit

Money Free and Unfree

by George A. Selgin · 14 Jun 2017 · 454pp · 134,482 words

sponsors capable of making up for the loss), had to reduce its share price below the pledged $1 level to 97 cents. Reserve Primary’s “breaking the buck” led to several days of large redemptions from other (especially institutional) prime money market funds and, thereby, to a sharp drop in the demand

Investment: A History

by Norton Reamer and Jesse Downing · 19 Feb 2016

savings institutions could pay, which was a large problem during this inﬂationary period. The central mission of these funds was to generate returns while not “breaking the buck,” or having the net asset value decline below $1 per unit. Indeed, these funds rarely failed at their mission, with the exception of some

Planet Ponzi

by Mitch Feierstein · 2 Feb 2012 · 393pp · 115,263 words

so safe you don’t have to think about it. (Truth is, it never was.) Banks might fail, including large ones. Money market funds may ‘break the buck’‌—‌that is, lose money. Equally, you need to shed some of your Ponzi-ish optimism. House prices have fallen, but they may fall further

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies

by Jeremy Siegel · 7 Jan 2014 · 517pp · 139,477 words

Market Fund made a most ominous announcement. Because the Lehman securities that the money fund held were marked down to zero, Reserve was going to “break the buck” and pay investors only 97 cents on the dollar.3 Although other money funds reassured investors that they held no Lehman debt and that

The Bond King: How One Man Made a Market, Built an Empire, and Lost It All

by Mary Childs · 15 Mar 2022 · 367pp · 110,161 words

$1 out, at any time. If the value of the fund’s assets dips below $1 a share, which it never should, that’s called “breaking the buck.” When Lehman filed, the value of one Reserve Fund share fell to $0.97. It was the second buck ever broken. Investors rushed to