"What's safe? Anything insured"
"What's safe? Anything insured" says USA Today. It says, "Faith in money funds was severely shaken on Sept. 16 when the Reserve Primary fund fell below $1 a share. The news sparked a run on money funds, mostly by institutional investors. In response, the Treasury Department announced a plan to temporarily guarantee money funds.... The guarantee is limited to assets in money funds as of Sept. 19, and will only remain in effect for three months. Participation by money funds is voluntary, and they must pay a fee. So far, eight [now 9] of the 11 largest money fund managers have signed up, says Peter Crane of Crane Data." The article continues, "And what about money invested after Sept. 19? While those funds won't be covered by the guarantee, the program has made money funds safer for new investors, too, Crane says. That's because the guarantee stopped investors from pulling their savings out of money funds, which was the biggest threat to their survival, Crane says. Finally, it says, "The Reserve fund blowup also caused money funds to 'get religion' and invest their assets more conservatively, Crane says."
