Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I might have pointed to Larry Summers as the Democratic poster boy for deregulation. Between 1992 and 2001, Summers held various positions in the US Treasury Department, including that of Treasury Secretary from 1999 to 2001. Summers has described…
You can also hold the paper bonds yourself, perhaps in a safe deposit box.
The mail in process isn't hard, though a tad more tedious than one would like. And you only have to create that second account once.
As I've posted before, the USPS lost …
Lewis is right, I"ve done this. The conversion is easy but a nuisance.
The TreasuryDirect instructions are here:
https://treasurydirect.gov/savings-bonds/manage-bonds/convert-paper-to-electronic/#id-how-do-i-convert-my-ee-or-i-bonds--508815
Ba…
If there is any place where the vulnerabilities of the system to runs and fire sales have been clear-cut, it is money market funds.
...
Even without a fixed NAV, liquidity mismatch in other kinds of funds can still make them vulnerable to runs and …
Everything lost money last year, as you noted. VWINX was in the top decile in 2022.
https://www.morningstar.com/funds/xnas/vwinx/performance
Not so great YTD. At least part of that is due to its mandate - generate income. On the equity side, i…
Be careful what you ask about. You might get more than you bargained for :-)
There were a couple of exceptions to the "usual" step up rule in the past, there's one current exception (in timing), and potentially one in the future. Perhaps othe…
It's a variant of TBTF bailouts. If the bank's insolvency doesn't rock the boat, it goes under. But if it is large enough to affect the financial structure .... A variant of the aphorism:
If you owe the bank $100 that's your problem. If you o…
Half of the deposits that remained post seizure have already flown the coup:
$119B in Silicon Valley Bridge Bank deposits on March 10th.
$56B in deposits transferred (sold) to First CItizens
-----
$63B in deposits pulled out of the bridge bank.
htt…
A little common sense here would go a long way. If one could use current day prices for some of the costs (improvements), then why not also use current price for the base cost as well? Voilà, no capital gain, nada. Problem solved :-)
OF course…
ssue not easily dismissed by red herring arguments. Of course other instances of injustice have existed throughout history. Doesn’t in any way explain or justify this instance.
I think you missed my point. Depositors who get "only" $250K of insur…
it was clear to the "market" (but not to regulators?) that IF the HTM Treasuries were marked-to-market, the equity (the book values) of the failed banks would have been wiped out.
What does "clear to the 'market'" mean? Are we talking about the m…
Some uninsured depositors lucked out by getting coverage. We can complain all we want about how they shouldn't have gotten covered, verily how they exacerbated the problem. Still, depositors at other institutions aren't being shortchanged a nick…
At least at Fidelity, QCD is not as seamless as a DAF. There is no online method to transfer the funds.
https://www.fidelity.com/learning-center/personal-finance/retirement/qcds-the-basics
Click on "Make a QCD". The pop-up that appears reads:
H…
a bet on a long-term CD at a high interest rate has it's own risks for the issuing credit union or bank, and that risk is sort of the opposite from what took down Silicon Valley Bank recently. If the Fed's interest rates come down in a year or two t…
I just checked and Fidelity charges $75 for Vanguard and Dodge and Cox funds. A $50 fee would have been a real investor improvement for Fidelity but I guess Abigail Johnson needs to keep her net worth over $20 billion !
Don't forget Schwab funds. F…
With respect to directly- (bank-) sold CDs, Ken Tumin at depositaccounts.com has a cautionary note:
Some banks and credit unions have language in their CD disclosures that allows them to refuse an early withdrawal request. Although CD early withdraw…
"Sweep account" is essentially a marketing term that is used differently by T. Rowe Price and by Fidelity.
A "settlement account" (what Fidelity calls a "core" account) is where the cash comes from to settle all your brokerage transactions (includi…
I transferred the securities in my TD account to Schwab in 2020 w/o any problems whatsoever, and got a decent transfer bonus. Maybe that's because I did it long before they actually began moving accounts? *shrug* (I moved early b/c I didn't want t…
A dividend from USAA would have been the right thing to have done for its members so I don't fault Schwab
The right thing to have done, as with any sale, was to have compensated the owners for the sale. USAA's members were customers receiving se…
Generally speaking, one cannot buy institutional class shares at Merrill - just the higher ER retail shares. Its online system still has some archaic quirks.
On the plus side, ACAT transfers (in-kind) to and from Merrill are handled very quickl…
When rates were effectively zero, fund sponsors subsidized their funds so that they all yielded 0.01%.
SWVXX 7 day yield w/waivers: 4.49%: w/o waivers: 4.48% (as of 3/22/23)
https://www.schwabassetmanagement.com/products/swvxx
E/R (after waiver)…
It depends on a lot of things. I've transferred a few funds that one could not (at the time) open at a brokerage.
Most recently, I transferred some Vanguard admiral class shares to Merrill (for a bonus and to maintain a balance for higher credit …
There are too many variables and possibilities for me to write up a complete description let alone an analysis right now. Difference in tax rates post-retirement, number of years until retirement (at which point you should switch to IRA since the …
I'd be upset about $9K as well. One of us is off a decimal place. I think it's you :-)
0.09% x $1,000,000 = 0.9% x $100,000 = 9% x $10,000 = 90% x $1,000 = $900
If they're really charging $9K, the analysis is a lot different. Let me know.
Introductory question: if it were economically better to roll half the 401(k) into an IRA, wouldn't the benefit be even greater if you rolled the whole 401(k) into an IRA?
It's pretty clear that if your tax rates (or those of your beneficiaries) a…
A bank will fail if there's a run on the bank in excess of the amount of cash the bank can raise.
Negative equity makes it hard for a bank to raise a lot of cash, since even if it could liquidate its investments without driving prices down, it s…
SVB Bank was taken over by the Feds/FDIC. The government-run SVB Bank is now among the safest and with the best/unlimited deposit protections.
Let's watch our redundant letters here (Silicon Valley Bank and SVB Bank). :-)
Silicon Valley Bank (SV…
Technically that is true. An FDIC-insured bank is ineligible to file for bankruptcy under the bankruptcy code. "Instead, regulators seize insolvent or unsound banks or thrifts and give the Federal Deposit Insurance Corporation (FDIC) the authority…
Didnt it occur to them that the pandemic would not last forever, and their payroll would have to drop back to more normal levels?
NPR's "doubling" figure likely represented the growth of full-time employees from 2019 (44,942) through 2022 (86,482).…
I will presume that the outflows you mention are due to the non-Treasury holdings being a larger percentage vs their other MMKT's that are 'more' Treasury oriented, yes?
Yup. Flight to quality. Personally I don't see a direct connection betwee…
I suppose it could be - SNOXX has to turn over its portfolio faster and could have been acquiring more lower yielding paper. But with rates gyrating by the minute, it's hard to tell.
More interesting to me right now are the inflow rates of MMFs i…
I saw that too. Perhaps he drew his inspiration from here:In interviews with [Business] Insider, founders and investors acknowledge privately that they are looking to Twitter as a case study of efficiency. (All spoke on the condition of anonymity,…
When a bank goes bankrupt, depositors are at risk because they are general creditors of the bank. FDIC insurance guarantees that $250K/account type/owner will be covered even if the bank has no assets to pay with.
Brokerages are different. The …
the FDIC does not use "government money" to make depositors whole. The monetary resources of the FDIC are generated by surcharges on the FDIC covered banks.
So long as those resources don't run out (they never have, so far). After that? The FDIC…
Retail-prime SWVXX may have gates or redemption fees without much notice. That may be a problem for check writing and other essential payments. SNSXX is a government/Treasury money-market fund with much lower probability for that.
Arguably zero prob…
I bet the Sweep accounts at Fido are a lot stickier. If so, maybe this will encourage Schwab to eliminate requirement to buy MMF rather than Sweep.
That's problematic because non-sweep MMFs are prime funds. Quoting Schwab, "Per SEC guidelines, liq…
Depositors with big cash holdings are – reasonably – expected to be aware of the risks and spread their cash around several institutions. Businesses backed by venture capital, such as the customers of SVB, ought to have been advised how to manage th…
@Observant1 hit the nail on the head - moral hazard. If the Treasury implicitly backs up every bank that botches things so badly that they create "systemic risk", then not only do we have the "normal" moral hazard created by insurance (indifferenc…
For a small fee, IntraFi (old ICS/CEDARS) would auto-split your $stash into multiple FDIC insured banks, or you can do this yourself.
https://www.intrafi.com/solutions/depositors/
To a limited extent, some brokerages provide a similar service with t…
Goldman Sachs offers a high yield savings account that pays 3.75% and is FDIC insured. I am considering this option.
Marcus will give you and and existing customer who refers you an extra 1% for three months. See if someone will send you a referr…
