Today's New York Times features "Where to Keep Cash When No Investment Seems Safe", saying, "CASH used to be the most boring of assets. But not this year. Nervous depositors rushed to withdraw money from IndyMac Bank.... Investors holding supposedly liquid auction-rate securities were stunned to discover they could not sell them after the markets seized up in the spring. Others watched as a string of money market mutual funds had to be bailed out. And still others suffered losses in ultrashort bond funds, once considered pillars of stability."
It quotes Crane Data's Peter Crane, "Normally, bad news for the economy is good news for cash investors. But because of the flight from the subprime mortgage contagion, this time is different." Crane adds, "Don't be greedy." With money funds, he tells NYT, don't be "`in the No. 1 yielding anything. You want to be a B student."
