Press Releases Archives: October, 2007

"Money-Market Funds Reassure Investors" Says WSJ. The article says, "Some advisory firms have taken action to buy back troubled securities that could have become unsuitable or, at worst, caused funds to 'break the buck,' or drop below the $1 share price they strive to maintain." It quotes Peter Crane, on "record inflows in the third quarter" and notes, "Assets in the funds are approaching $3 trillion." It also quotes Susan Wyderko of Mutual Fund Directors Forum, saying "she is aware of a number of money-market funds at which ... have taken action to moderate the impact of decreases in the value of the funds. In these cases, the advisers have purchased securities, taking the losses upon themselves."

Money Funds Make Front Page of Boston Globe (Along With Red Sox). Today's Boston Globe features an article entitled "Credit crunch highlights risks in money markets", which asks "How safe is your money fund?". Like many recent articles, the title is much scarier than the actual text. The Globe piece mentions SIVs (structured investment vehicles) and Wachovia's $40 million buyout of securities from its Evergreen funds, and discusses the minor historical SIV holdings of Fidelity and Columbia. It also briefly explores the history of money fund credit events, mentioning Community Bankers US Government Money Fund (though incorrectly stating its liquidation at 94 cents instead of 96 cents). The Globe says, "Moody's knows of 145 serious cases of money-market fund problems since 1972," while failing to mention that no individual has ever lost money on any of these. It also quotes Peter Crane on the recent asset surge to $3 trillion and mentions

Sunday's New York Times writes on cash parking spaces, "Shedding Stock-Market Vertigo (but Still Making Some Money)". The article says cash rates have not fallen as much as they normally do after Fed cuts, and that money market rates remain attractive vs. lower longer-term CD rates. "Many funds have only dropped half of what they'd be expected to drop," said Peter Crane, president of Crane Data, which tracks money market investments, quotes the Times.

Peter Crane To Host Webinar "Is Your Cash and Money Market Safe?" Crane Data President Peter Crane will host an AFP Webinar entitled "Is Your Cash and Money Market Safe?" on November 15 from 3:30-5:15 p.m. Join our money market mutual fund expert to hear about the recent turmoil in the money markets. Crane will discuss regulations and protections surrounding money market funds, securities money funds invest in, and the timeline of crisis events and problems in the asset-backed commercial paper market. Issues with auction-rate securities and enhanced cash funds will also be discussed. Visit AFP to sign up or for more information. Crane Data hopes to see you at the AFP Annual (Treasury) Conference in Boston starting this weekend too.

"Despite rate cut, money funds continue to attract assets" in Investment News. IN discusses the continued growth in money fund assets and the lack of interest in short-term bond funds, which normally would be benefitting from a falling rate scenario. The article quotes Peter Crane, "Usually, money fund yields drop when the fed funds rate is cut, but that hasn't happened, Mr. Crane said. He noted that they have come down slightly but not enough to reflect the half-point cut."

Bloomberg Adds Crane 100 Money Fund Index and Crane Averages. Starting today, users of the Bloomberg Professional service now may access current and historical data on the Crane 100 Money Fund Index, Crane Data LLC's flagship average yield benchmark measuring the 100 largest taxable money market mutual funds. Bloomberg users will also have access to monthly performance data on the Crane Money Fund Average, which tracks a broader universe of 780 taxable money funds, and the Crane Tax Exempt Money Fund Index, which tracks 405 tax-free and municipal money funds. The list of indexes and data points available may be seen by Bloomberg users that enter "ALLX CRNI", and the Crane 100 is ticker "CRNI100D". Contact Pete for a listing of all indexes and for sample of our monthly Crane Index product.

The October issue of Money Magazine (article not available online yet) writes about "The Money Fund Scare", saying, "Let's set the record straight. Money funds, though not FDIC-insured, invest only in high-quality debt with less than a year to maturity.... [S]trict Securities and Exchange Commission rules limit a fund's holdings below the very top credit tier to just 5%, a percentage that most money funds rarely come close to, according to Peter Crane of Crane Data LLC".