AP features "With risk of debt default allayed, money funds remain safe bet". It explains, "Money market mutual funds have passed their first big test since the 2008 financial crisis. Risks of a US debt default sent investors fleeing the low-risk cash investments in recent weeks, stirring up memories of a money fund's collapse triggered by the bankruptcy of Lehman Brothers. This time, money funds' perceived weaknesses were their huge investments in Treasury bonds, and fears that the government might not make good on those IOUs. `As talks to lift the nation's debt ceiling stumbled, investors withdrew a net $122 billion from money funds in the seven-day period ended Monday, according to industry researcher Crane Data. That exodus trimmed almost 5 percent of the $2.6 trillion that the funds hold. It was comparable to the rush out of money funds in September 2008 when one of the largest funds collapsed, leaving investors temporarily unable to access cash and facing small losses on their investments. The debacle marred a near-perfect safety record for money market funds in terms of protecting investors from losses. There haven't been any indications that any funds have run into such troubles this time around, with no investment losses or frozen cash." Bloomberg also writes "S&P Affirming U.S. Short-Term Debt Ratings May Keep Money Markets in Check". The story says, "The decision by Standard & Poor's to affirm the U.S.'s short-term rating at the top A-1+ level even as it cut the long-term grade from AAA may help to stabilize money markets, according to strategists and economists. The move means money market funds won't be forced to sell Treasuries, said Mansoor Mohi-uddin, the Singapore-based chief currency strategist at UBS AG. The 'impact' on money funds 'appears to be limited,' Philip Marey, the senior U.S. strategist at Rabobank Groep in Utrecht, Netherlands, wrote in a report to clients. While S&P has warned since mid-July that a downgrade was likely, measures of distress in short-term funding markets have declined since then, signaling that traders expect little disruption." Finally, FT writes "Focus turns to US money market funds ", which says, "US money market funds will be keenly watched by investors and banks this week as they wait to see the reaction to S&P's long-awaited downgrade of US government debt."
