Word: bankes
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Dates: during 2000-2009
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...back to be beginning, to being a do-nothing. At this point, there is a greater risk from mass redemptions - like a run on the bank - than there is from a rash of money funds declaring that their assets have gone bad. Money market funds are designed to be low risk, and by law are allowed to invest only in government bonds, certificates of deposit, short-term IOUs issued by companies, and other highly liquid securities - though, unlike the similarly named "money market deposit accounts" found at many banks, they're not FDIC-insured...
...Will more companies have to step in and prop up the value of their money market funds? Probably. Will more funds break the buck? Maybe. But short of having all your money in FDIC-insured bank accounts, which most likely carry lower yields, there aren't that many options that are safer...
...Chinese proverb, it probably should be. As Gao Xiqing, the chief investment officer of China's $200 billion sovereign wealth fund, meets in New York City this week with Morgan Stanley CEO John Mack to discuss increasing the Chinese government's stake in the venerable - and flailing - investment bank, he bears an obvious burden. Last December, the CIC (the China Investment Corp.) invested $5 billion for a 9.9% stake in Morgan Stanley (for which the bank must pay CIC a 9% annual dividend until 2010). On paper, that investment is now down more than 25%. Worse, Beijing paid $3 billion...
...meant the firm would make money even if the stock plunged to $24. It did - and then some. By late last week, Merrill traded at just over $17 a share, increasing the pressure on CEO John Thain to do a deal. Over the weekend, he sold the firm to Bank of America in an all-stock transaction worth about $29 per share for Merrill shareholders - which means Temasek could walk away with about a 20% return should it sell it shares. The Temasek deal last December, banking sources say, taught everyone in the region a lesson: If you're talking...
...more appealing should the market rout intensify, there's another factor in play: governments in East Asia and the Gulf want their funds to help domestic companies, not foreigners. On Thursday, for example, Beijing's CIC announced it would make investments in three of China's biggest commercial banks - Industrial and Commercial Bank of China, Bank of China and China Construction Bank - that themselves are getting hurt by an economic slowdown and a real estate slump at home. "This is a significant policy initiative aimed at supporting China's leading financial institutions at a time of global turmoil," says Jing...