Press Releases Archives: December, 2007

The Wall Street Journal writes "How Turmoil Melted a Money Fund", which discusses how Credit Suisse Prime Institutional Money Market Fund Prime grew from $1 billion to $25 billion and back down to $10 billion. The piece says, "While money funds at several U.S. banks have been hit with similar losses, the Credit Suisse fund has suffered the most dramatic investor outflows. One reason: Other funds had more-stable investor bases anchored by longtime individual customers." It quotes our Peter Crane, "Credit Suisse was the only money-fund family to see significant outflows during the recent turmoil."

FT says "Superfund collapse 'embarrassing' to Treasury". The article comments, "As rumours spread that the deal was to be shelved, the reaction in the money market was relief rather than anxiety." It adds, Peter Crane, of Crane Data, told Reuters: "It is akin to not having to use your insurance policy - the reasons for the fund to be there have gone away, which is good news."

Jane Bryant Quinn writes in Newsweek "A Safe Harbor In the Storm". Quinn writes in her "Capital Gains" column, "The 'safe savings' of individuals, however, are doing fine. You're even getting some benefit from the market's pain.... So far, seven sponsors are known to have supported their funds, says Peter Crane of Crane Data, which tracks the industry. They're blue-chip names: Bank of America (Columbia funds), Wachovia (Evergreen funds), Credit Suisse, First American (a unit of U.S. Bancorp), Legg Mason, SEI Investments and SunTrust Bank." See also WSJ's "More Money-Market Funds Hit Trouble".

Bloomberg TV interviews Peter Crane on "Citigroup's Bail-Out of Seven SIVs". On Citi's plan to back its affiliated structured investment vehicles, Crane says, "Money-market mutual funds are one of the biggest investors in SIVs, so this is good news for money funds themselves and for money fund investors.... This removes a bug chunk of worry from those funds." Crane adds that the move won't impact Citi as much as some expect, "The SIVs don't really need all the money at once. What citigroup will be doing in effect is extending lines of credit as the issues of commercial paper and medium-term notes come due."

WSJ's "Why Borrowers May Not Benefit From Rate Cut" mentions the impact of a higher LIBOR rate on money fund investors. "Higher Libor rates have helped sustain healthy returns in money-market mutual funds. These funds' holdings of Libor-linked debt have helped to offset declining yields on other investments. An estimated 20% to 25% of money-market assets are in floating-rate debt, much of which is linked to Libor, says Peter Crane of Crane Data LLC."

Barron's asks "Why Money Funds Are Thriving in the Chaos"? Columnist Jack Willoughby quotes Peter Crane, Bruce Bent, and Peter Rizzo in a contrarian story which discusses whether the press and institutional investors have overreacted and hurt the money markets, and whether problems merit the concern shown to date. Barron's writes, "Some classes of fund investments are holding up just fine despite these folks -- and the credit storm and fears of a busted buck. Among them are money-market mutual funds, says Crane."

Bloomberg TV interviews Peter Crane in "In-Depth Look: Florida's Investment Pool Trouble". Yesterday, Crane said of the Florida LGIP, "Although this is not a money market mutual fund, it's just like one. Money market mutual funds are in effect bank account substitutes.... It's a game of confidence. The first thing you want is investors to rest assured that their money is saf. So if Florida steps and, says they're going to back everything, most of the problem goes away." See also Crane's comments in MarketWatch's "Florida allows some withdrawals from troubled pool".

WSJournal's "Lessons Learned From a Wild Year" Features Peter Crane. Today's Wall Street Journal features comments from Crane Data founder Peter Crane in the article "Lessons Learned From a Wild Year", which is contained in WSJ's monthly "Investing in Funds" analysis. Crane says, "'Don't get greedy' and 'don't get excited' are my two favorites [lessons] from 2007. Investors were protected in money-market funds, but suffered damages in a lot of investments that claimed to yield more than 'cash' with no additional risk.... With money-market funds, some investors made the mistake of fleeing to Treasury funds, which offered pitiful yields. They were in effect shooting themselves in the foot, losing two percentage points of yield, in order to avoid the remote possibility of losing perhaps one percentage point of yield should their adviser not 'bail out' their prime money fund."