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Of course, there is also an issue of moral hazard that Mr. Paulson created when he insured money market funds.
In the 1980s, the outrageous investments made by S&Ls with federally insured money.
We want a system that does not use savers' federally insured money to invest over-aggressively so that individual bankers can make enormous bonuses.
The Volcker Rule, thoughtful readers will recall, is the part of the Dodd-Frank financial-reform law that prohibits banks from proprietary trading, or using their federally insured money to make big stupid bets, leaving us on the hook to bail them out when it all goes horribly wrong.
A visit to citifi.com, its Web site, found its insured money market account paying a 5.50percentt rate, for an annual yield of 5.65percentt, with a $1,000 minimum.
Save up to 2, then 3 and prepare, eventually, for up to 6 months in an actual "emergency-fund", perhaps in an insured "money market account", for only true emergency expenses: for the loss of a job, having a serious illness, etc. -- not for stuff.
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The Treasury Department, in a coordinated announcement, said it would use $50 billion in the government's Exchange Stabilization Fund, a fund normally reserved to deal with currency imbalances, to insure money market fund customers against losses.
Mr. Buffett has already stepped up in public, praising the steps the Fed took last fall to insure money markets and commercial paper as "vital in keeping the place going" (if the Fed hadn't acted, Mr. Buffett told his CNBC interviewer, "we'd be meeting at McDonald's this morning").
The government will insure money markets, the government will buy between $800 billion to $1.2 trillion in distressed securities to sure up balance sheets.
In turn that has made other funds more cautious and led them to steer clear of bank loans and commercial paper.Buried among the many recent American regulatory initiatives was a scheme to insure money-market funds against failure.
The Treasury Department, in a coordinated announcement, said it would use $50 billion in the government's Exchange Stabilization Fund, a fund normally reserved to deal with currency imbalances, to insure money-market fund customers from losses.
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