former SEC chairman
SEC chairman Mary Schapiro announced last week that she has set her sights on your money market funds.
I'm sorry, but that makes no sense at all.
Losses on money market fund investments have been trivial in the almost 40 years they have existed.
What's more, they haven't added to the tottering instability of global finance. Not one wit.
Her attempt to come down on money market funds is nothing more than crony capitalism at its most unpleasant.
The regulators, who under the Obama administration simply like regulating, are just in cahoots with the big banks, seeking to eliminate their competition.
In this case, what the banks would like to do is simply turn back the clock.
After all, in the 1960s, banks had a very easy life, because interest rates were regulated.
The old adage was "3-6-3" banking - borrow at 3%, lend at 6% and be on the golf course by 3 p.m.!
It was a good deal for the bankers but not such a good deal for those forced to lend to the banks at 3%--especially as inflation rose in the late 1960s to 4%, 5% and higher.
In fact, it was no wonder that when I first opened a U.S. bank account in 1971 that I was rewarded with a full set of bone china! Attracting savings was THAT profitable!
But all of this changed with the establishment of money market funds.