Reuters writes "Analysis: Money funds show resilience despite debt fears". It says, "Money market funds face uncharted waters if a debt deal is not reached soon in Washington, but Joe Morgan is not ready to abandon ship. As Chief Investment Officer of Silicon Valley Bank's asset management affiliate, Morgan keeps about $10 billion in money market funds, including $5 billion in government funds loaded with Treasury bills.... But Morgan expects that, even if the government were forced into a technical default, officials would still find a way to pay bondholders. Money fund sponsors, meanwhile, have built up enough liquidity to convince him they could manage, even if other institutional investors yanked money out of the funds.... However unlikely the chances of that, big money fund sponsors such as Fidelity Investments of Boston and Federated Investors in Pittsburgh have moved to calm investors. Both companies and others have held meetings with investors and sent out briefing papers. Some such as BlackRock and JPMorgan Chase & Co have also asked clients to reconsider guidelines, such as discussing whether limits on holding debt rated less than AAA should be revised. A Fidelity spokesman said it has stress-tested its money funds so they can withstand significant market volatility. In an emailed statement, the spokesman also said its money market funds have removed all U.S. Treasuries that mature in the first two weeks of August "to avoid volatility from the deadline" of August 2 in the Washington debt talks." See also, WSJ's "For Investors, Cash Is King".
