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More SIV Concerns After Fed; Money Fund Assets To Break $3 Trillion. While another bout of concerns over SIVs, structured investment vehicles, washes through the post-Fed cut euphoria (see today's NYT's "M-LEC" update and FT's "Cheyne Finance deal in doubt"), money funds continue to weather and even benefit from the turmoil. Fed cuts raise the value of funds' existing money market holdings and institutions move to funds in order to delay the impact of lower rates. Money market mutual fund assets are about to break the $3 trillion barrier, perhaps as early as today. Assets stand at $2.97 trillion, a mere $30 billion below the $3 trillion mark, up a stunning $716 billion, or 31.8% over 52 weeks ago. ICI releases its weekly numbers around 4:30 today, and we expect a jump as Fed-related inflows outweigh month-end outflows. Yields on money funds, averaging 4.79%, will decline due to yesterday's Fed cut, but they continue to compare favorably with alternative direct market investments such as repo and Treasury bills and with longer-term and lower-quality fixed-income investment options.
