The Wall Street Journal writes "Money Funds Brace for Flood". The article says, "BlackRock Inc. and Federated Investors Inc. might bolt the door to shield their funds from a torrent of money that is expected to flood out of U.S. banks when a federal guarantee lapses on roughly $1.7 trillion in bank deposits. The big money managers worry that cash pouring into the $2.65 trillion money-fund industry will further depress record low yields, hurting investors and making it costlier for managers to operate. If the influx is large enough, BlackRock and Federated have told investors, some money-market funds could be closed to new entrants, said people familiar with the conversations. The private communication is an early sign of the turmoil that could result from the end of a measure installed during the 2008 financial crisis to encourage small businesses to stay with their local banks. The unlimited Federal Deposit Insurance Corp. guarantee on no-interest bank accounts is expected to end on Dec. 31 and revert to $250,000 per depositor for each account category. An effort to extend the program died in the U.S. Senate last week." The Journal quotes Pete Crane, "It could be a tsunami."
