Bogus headline

[bobfl]

Bloomberg released a headline after the deposit numbers came out today:

"US Bank Deposits Decline by Most in Nearly a Year"

I wondered why US BANK had such a run.

The headline was poorly written and the story had nothing to do with US Bank.
It should have said:

"Top 25 US banks gain substantial deposits; small banks have major loss in deposits."

(US BANK, also known as US BANCORP, is the fifth largest bank.)

A person who is not signed up for Bloomberg can't read past the headline.

[FD1000]

Mar 25, 2023 2:16:36 GMT bobfl said:

Bloomberg released a headline after the deposit numbers came out today:

"US Bank Deposits Decline by Most in Nearly a Year"

I wondered why US BANK had such a run.

The poorly written headline had nothing to do with US Bank.
It should have said,
"Top 26 US banks gain substantial deposits; small banks have major loss in deposits."

(US BANK, also known as US BANCORP, is the fifth largest bank.)

A person who is not signed up for Bloomberg can't read past the headline.

Nothing new, bad news sell. A partial truth is part of the game. Any time you click, they get paid, or you pay in advance.

[bobfl]

If anyone is interested:
"Bank deposits fell by $98.4 billion to $17.5 trillion in the week ended March 15, according to data released Friday by the Federal Reserve. Deposits at small banks slumped $120 billion, while those for 25 largest firms rose almost $67 billion."

Yes, some of that has moved into MM accounts, particularly out of sweep accounts. Does anyone remember in around 2008 when the safe MM accounts suddenly only paid back only (corrected) .97 and destroyed the faith in MMarkets for a long time?


www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp#:~:text=On%20Sept.,sent%20shockwaves%20through%20the%20industry.

[FD1000]

Mar 25, 2023 13:32:21 GMT bobfl said:

If anyone is interested:
"Bank deposits fell by $98.4 billion to $17.5 trillion in the week ended March 15, according to data released Friday by the Federal Reserve. Deposits at small banks slumped $120 billion, while those for 25 largest firms rose almost $67 billion."

Yes, some of that has moved into MM accounts, particularly out of sweep accounts. Does anyone remember in around 2008 when the safe MM accounts suddenly only paid back only 80 cents and destroyed the faith in MMarkets for a long time?

The Reserve Primary Fund broke the buck, but I don't think it ever happened at VG,Fidelity,Schwab where most should hold their money.

[yogibearbull]

Well, even the failed Reserve Primary money-market fund paid 99.1c with some delay. Some other m-mkt funds that got into trouble during the GFC 2008 were rescued by their parent firms, or they were merged away, so those almost-failures didn't happen. Of course, the Fed implement unlimited insurance for them at 10 bps fee that lasted from 2008-10. BTW, m-mkt fund AUM has reached $5.22 trillion AUM now.

en.wikipedia.org/wiki/Reserve_Primary_Fund
fred.stlouisfed.org/graph/?g=11MaB

[fishingrod]

The Reserve Primary Fund was the original money market founded in 1970. When it broke in 2008 it held almost 63 Billion.

Vanguard's cash reserves MM VMRXX has 98 Billion now.

[bobfl]

"On Sept. 16, 2008, the Reserve Primary Fund broke the buck when its net asset value (NAV) fell to $0.97 cents per share. It was one of the first times in the history of investing that a retail money market fund had failed to maintain a $1 per share NAV. The implications sent shockwaves through the industry."

[retiredat48]

Mar 25, 2023 13:32:21 GMT bobfl said:

If anyone is interested:


Yes, some of that has moved into MM accounts, particularly out of sweep accounts. Does anyone remember in around 2008 when the safe MM accounts suddenly only paid back only 80 cents and destroyed the faith in MMarkets for a long time?

I don't recall any MM Fund paying back 80 cents on the dollar.  At worst, some broke the buck and paid 99+cents on the dollar.

Why scare investors with this type of post/hype.  No way MM funds go to 80 cents on the dollar.

R48

[bobfl]

Mar 26, 2023 5:07:41 GMT retiredat48 said:

Mar 25, 2023 13:32:21 GMT bobfl said:

If anyone is interested:


Yes, some of that has moved into MM accounts, particularly out of sweep accounts. Does anyone remember in around 2008 when the safe MM accounts suddenly only paid back only 80 cents and destroyed the faith in MMarkets for a long time?

I don't recall any MM Fund paying back 80 cents on the dollar.  At worst, some broke the buck and paid 99+cents on the dollar.

Why scare investors with this type of post/hype.  No way MM funds go to 80 cents on the dollar.

R48

Correct. I will edit the above and provide the following link. That was 15 years ago and I held MMs. Perhaps it was rumors flying around that clearly burned into my brain. I held MM at that time; thought they were totally safe and as the article said it certainly sent shock waves through me. It is like all the bs flying around now about various banks.

But the article below states the low was .97 and that was not the current type issued. You say 99+; I remembered (incorrectly .80), the facts appear to be .97.
www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp#:~:text=On%20Sept.,sent%20shockwaves%20through%20the%20industry.

[yogibearbull]

From the previously linked Wiki info, the Reserve Primary Fund NAV dropped to 97c right after Lehman collapse, but then it was frozen, and eventually settled at 99.1c upon liquidation.

Bruce Brent is credited with "inventing" the m-mkt funds with the launch of Reserve Primary Fund. After the Lehman collapse, the Lehman paper the Fund held became worthless (even the regulators at the time didn't foresee this aspect of Lehman failure). The SEC charged father and son Brent with fraud. A jury found that may be they were negligent, but didn't commit fraud.

[retiredat48]

Thanks yogi.  bobfl,...99+% = 99.1%...   !