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Kaltbaum Capital Management’s Gary Kaltbaum and Bankrate.com Senior Analyst Greg McBride on efforts to regulate money market mutual funds.
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Every -- that topic of the now which is that you know -- -- Other people -- you know people who support this.
Would say that don't look at the end of the day the government shouldn't have to stand behind these buttons.
Either should be taxpayer dollars -- risks pat -- come out on that his right.
Well look.
When all is said and done money is going to flow where it's treated best.
And when you start putting fees and regulations on to that money.
It's going somewhere else so weakened talk blue in the face what's right what's wrong.
There is a competition -- money on a daily basis from so many areas of the markets whether it be.
Equities bonds money markets.
Futures you name it and if they tried pulling myths I can promise you money is gonna just blow away from the money market funds -- children have to shut down.
You just don't want to put them.
Gates on the markets because especially in times of stress when their stress and people are emotional and you're telling people you can't get your money.
We'll soon as you open up those gates they have been a run for the -- And that's where problems really right so I don't think they thought this -- I think these are people that are all about regulations and fees and -- -- so start thinking twice before coming up with some.
Like that's Greg what's the right solution should there be a solution to their -- regulatory solution.
-- I think they've already done enough -- -- the reforms are put back into 2008.
Requiring money funds hold shorter term instruments.
Not only does that undercut yields.
But again and what's not to have a knee jerk reaction designed to avoid the last crisis -- -- money funds are very safe investments.
They break the buck would very very rarely.
And -- investors very rarely lose money because a lot of those cases.
The money for the fund companies themselves step up and make investors whole so.
I again I think this is over cal I am I I don't think I'd I'd I think the best solution here -- frankly is is no solution.
Is no solution -- I've got to ask you this questions I think it's right up your Alley so you'll remember the financial stability oversight council right.
That this group a -- acts who were supposed to see the next problem coming.
And they work for the government -- so that things -- think considering our floating asset values on money market funds redemption hold back some capital buffers.
So how much confidence do you have.
In a government authority that's supposed to see around the corner and see the next problem that's gonna.
Blow up on Wall Street.
Well look I've been yelling and screaming the F for years that these people that have watched and overseeing things.
And basically caused a lot of the problems and now the ones that supposedly -- come -- with the solutions to the problems.
That worries the heck out of me.
Again on the big believer in free markets let them be let -- roll people have to read the fine print on money markets to real life.
That they even though they've most of them but stated dollar just about all of -- They can come down if bearing bad that people need to understand that but if you start putting all these things on top of each other on top of each other.
You were gonna creating real big problem if we ever get that situation get -- -- we have great point is the fact that during the worst stress we have seen in ages.
Only one mutual fund all the resort fund broke the bucket that time so I'm not as worried about these other people and again the worried -- most definitely in -- -- It is -- let's face -- the smartest minds on Wall Street did not see the housing bubble ready to burst.
They didn't see the dot com bubble already universe they miss everything see you think a bunch of guys.
Who are appointed and sit on some board somewhere -- -- Washington DC.
And see what the next problem it's gonna be I don't buy it.
We watched for two years as Ben Bernanke said sub prime lending is fine and housing.
Won't hurt the economy so if -- head of the Fed.
Can't get it right I doubt some of these bringing -- that are trying to come up -- rules and regulations.
Have any idea what's coming on frankly if they get next week's news paper today I don't think they would know what the news is next -- LI -- any credence and for them.
Well you know -- if you're an investor and you have money in money market funds are gonna wanna follow this story because it could be very meaningful TO.
-- Gary Gregg thanks for coming on tonight great to have you here appreciate your time.
Thank you thanks --
