Crane Data Subscribers
Money Fund Crisis Ends, But Past Bailout Events Still Claiming Victims. Money market mutual funds breathed a sigh of relief following Citi's pledge to back its structured investment vehicles Thursday. While hopefully this marks an end to the imminent threat posed by SIVs to money funds, fallout from prior bailouts of extendible asset-backed commercial paper issues and SIV defaults and downgrades continues. The Wall Street Journal reports that Moody's has changed its outlook on some debt of Legg Mason's to negative due to "possible losses resulting from investors pulling money from the company's money-market funds". (Note: Crane Data's numbers shows Legg's Western Asset money funds with $9 billion of inflows in the latest 3-months through 11/30.) Moody's says Legg Mason has a "very remote possibility of facing losses in excess of $1 billion but that a more likely loss outcome is under $300 million, and potentially, even well under that amount.... The outlook change was driven by challenges the company currently faces with regards to the uncertainty of impending losses that Legg Mason may incur in order to protect the net asset values of several money market funds". Also, Credit Suisse saw Keith Shappert resign. (See "People" News below.)
