Jan 14, 2013|
Beth Healy, Boston Globe, on Fidelity's plan to disclose Money Market Values daily
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Joining us now we do have Beth -- on the line from the Boston Globe and -- how are you this morning. -- great morning. So let's let's dig a little bit into this article because this is something that is a little bit of a change for fidelity. And they are announcing that they will disclosed daily money market mutual fund values so what are you explain to our listeners a little bit about what this means. Church that's something most of -- don't think about everyday but. Money market mutual funds that something you invest in to keep your money -- right you by the shares per dollar sell them back at a dollar. But what happened in the financial crisis is. You know these money market funds invest in things and the value of those things is another pretty state goes up and down. And so what that means is that even though your shares were a dollar technically. If you pull back the curtain that might be -- nineteen -- point 99. That that type of bank what they're gonna do is start disclosing the reality of that price. So that regulators and others can just keep a closer eye on how these under doing. And and working at this obviously it investors. That they invest in these money markets and they think it's just okay I'm putting a dollar and it's a dollar and always is but as you mentioned these funds are investing in things like very short term treasurys very short term bonds. Of that nature so is there any concern that if you do see prices moving a little -- the ticket it could spook people even though it has been happening all along behind the scenes anyways. There is only that worried now this won't be depressed -- see when you go to you know that the ball street firms are adopting meant to swap adopted it right after fidelity still very quickly these terms are all trying to take this measure to stave off more regulation. So when you go to your web site at your financial companies use it's still gonna say -- dollar you probably gonna have to do if you conflicts. To find this other price that you know quote real price so it could be something that probably institutions pay more attention to then average investors. It has been -- set exactly where they are going to be posting this at this point is it still. Largely unknown. Well we did prod them on -- it they'd they'd claim that it will be easy to find it's not going to be on page you know. 199. At the premiere page document it may just be about about a click away yourself. And a big reason for the push towards this style of valuation is second 2008. There were several funds a money market funds that did a quote -- quote break the box so what -- you explain exactly what that means to our listeners. It's still in fact only one broke. Literally broke the buck -- about means well enough runs really does double on below that dollar level. And that was the reader primary fund and it it it hailed it went out of business is only the second on in history that broke the buck by. There was -- study that says dozens of funds. It -- in cash infusions into their money markets to make sure that they didn't break the box. So that did kind of exposed this sense that in bad time in very difficult cash crunches. Firms to worry a little bit about. There liquidity or money market the reason being. You and I in big institutions and people are nervous they wanna go get their vote readily accessible cash and a lot of time that is the money in the money market. And and just two dig a little bit further into that point fidelity is never one of it has not been one of those companies that has had to make. Contributions to their money market fund correct. Correct and I think that's one of the reasons fidelity and lobbying so hard against stronger regulations he. He has error the biggest US manager of money market funds -- in their views they do a great job. In some way to think regulators maybe trying to look out for investors who are not with the top firms. Now -- the SEC at this point obviously. This should do something to appease them but they are still pursuing additional regulations at this point correct. -- -- -- he kind of failed in their effort to do that that was when Mary -- last -- enforce the stepped down from the post. But there is. There is another effort by and other federal entities -- doing overtake the financial stability oversight council and they're taking up. Very close to. The same thing she proposed. And so just to kind of recap this. In terms of on a day to day basis this is not going to affect individual investors in any way -- correct correct. OK so. In terms of you know really what it means it's it's kind of that behind the scenes just a little bit more disclosure just so that in particular those institutions to get a little clearer picture of what's going on the -- All right well -- I appreciate you coming on with us this morning. And I certainly something that's very interesting to look at and I'll have to keep in mind CA of greater changes do come to those money market funds in the coming months. All right that was Beth -- From the Boston Globe. Talking about again the fidelity money market fund and finale coming out and saying that they will disclose daily money market mutual fund values. Talking about really slightly slight changes in valuation from day today. Of hundredths of a penny essentially. So not something that'll affect the value of the funders that really -- effect investor confidence in these are things. That have been going on for a number of years. But just something to give investors a little bit more insight into some of the inner workings of these funds to. Okay and now of course -- still taking your Texas X 8680. As to what age you expect to retire and we. I believe it's coming I don't think we've done it quite yet. I think it's it's coming at some point and if if you are interest that we used to of that 25 dollar gas card when he hit the gas pump barrel at 888. 205. 2263 and make sure that you know the password from earlier in the show and we've got 617 coming in saying that they hope Mary staying at the buccaneer hotel. -- -- -- Yeah -- placed there I don't believe I think that the joke because I don't think it's the nicest place -- only -- maybe I've seen it I don't know -- known about it. And he. Is on instinct he has you know now I -- retaliating about -- -- I know it's not on that note down there -- warm. He's offered -- you know currency is. So he has offered to take you down before don't take me. It. I wanna takes. David Shia overall -- property -- -- -- here has aids then he radio stick together and I say it is not in the inner circle yet this little bit hurtful. You have a girlfriend also maybe. It's worth of this -- to me to go into coed baby showers at this point actually. -- -- my times taken up I have nowhere else to go when I gonna do. Don't do it -- I. Not a chance not a chance coming up we are going to be talking. About some money tips if you are going to be getting there a second time. We're going to be digging into that in depth. Right after this break on the financial exchange.