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And -- our next -- The rebound today but a rough start a rough year.
Our next guest has survived a number of financial crises.
And come out stronger than ever.
Jack -- he's the founder of vanguard -- he's joining us now from valley forge Pennsylvania.
Jack I'm so glad that you're here to make sense of all the Jack the first thing -- -- a -- this -- second in the history money market fund.
Broke the -- Panic back panic selling people running for the exits the treasury.
Stepping into -- -- more money market funds.
I just -- your reaction to that and just really how his historic that being.
-- Well it's -- historic disgrace again.
And I do think the thing that people have put together very well as.
Yes which money market fund with the one the first one to break the dollar.
The one that ended 2007.
-- they had the highest return of any money market fund for the year.
What does that mean that means they were taken more risk than they should have.
And if someone ever told me but my money market fund with the highest yielding money market -- out there I would head for the hills.
That's not the game -- -- keep the money safe.
-- getting into the insurance.
I think it's going to be interesting to see we don't have many details on that you know interesting to see what it is they're ensuring.
I don't see any reason the world they should insure money market fund that is buying junk.
And that's like insuring a dying person.
Not a good idea.
And but -- -- money market funds against abrupt fluctuations.
In the short term interest rates.
They short term interest -- should leap up a percentage point today I think it would affect a lot of money market funds depending on a precise maturity.
So that's a different kind of insurance.
That's -- like a market volatility type of insurance.
And I can see the possibility for that.
But if the federal government's gonna bail out money manager.
Money market funds -- managers have bought junk.
I don't and the courses like I should be clear the federal government that they anybody if you and made -- or bailing out everybody in the other taxpayers.
Well there's going to be -- if this plan goes through that was outlined by the Treasury Secretary and President Bush.
To buy up distressed assets is going to be even more money more tax -- money people are talking about hundreds of trillions of dollars Jack.
To stick to prevent this financial crisis from getting worse is that a good idea -- are you disgusted by well small small.
Correction hundreds of billions not hundreds of trillions I have had a -- -- thank you books we actually never correct the interviewer but what -- -- I know I'm not sure that -- losers -- you know it's modeled after.
The -- the old resolution trust company that.
That that could pretty much the same thing when saving for being close couple decades ago.
And I believe the record is then -- make -- money that bought those loans at their current values.
And soul of the higher values and I don't see why that's impossible here we don't know what the -- will they obviously and it could be a cost.
But I but I think that's probably one of the few really good ideas but I've heard this whole.
In this -- Panoply of that -- it -- and mandate that the government's trying to put on.
Our financial system.
And I particularly impressed because I've been around long enough so that someone is Smart.
That's bank early as wise.
And and it's tough as Paul -- recommend that kind of an approach I'm for -- Jack it do you think that at exactly what do you see on the horizon because you've talked about this that this is a very different.
Bear market a very different downturn and you've ever seen even despite maybe a rescue plan like that.
-- we still in for tougher times ahead where we as a nation wean ourselves off a credit.
-- -- -- Think it's pretty clear -- that in terms of the economy.
We're not through this yet.
Quite sure that that that the data somewhere along the way however applaud it may be able confirm that -- -- -- recession.
And I don't see that that's going to be something a very short duration Jeff and I think it could last for a little while.
Yeah years -- you know good finish what you're -- I just want your guidance on what -- do with your money here.
Felt real oblivious that -- that that the stock market may have already anticipated all of -- by dropping 20%.
And by the way that parenthetically that have been the best performing stock market in the world anyway.
So that's that's something to be a little comforted by.
My advice to people in individual investors not speculators the people who -- investing for the really long term.
Putting money away regulate it's just keep accurate business.
I don't peak.
Be very diversified.
You'll recognize these ideas keep your cost -- have a bond position.
The principal protection if you're older and to keep -- doing something stupid if you're younger.
Look smaller -- -- for the young and the old I think.
And just try and mean basically these kind of times.
Times of panic at times of great volatility are terrible times to -- investment decision.
Jack that's great is seen as always Jack -- yet new book coming out by the -- I can't wait to read it in November that taking enough -- not -- enough.
You said in one more Jack.
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