Friday afternoon, CNBC interviewed the WSJ's Ken Brown on his "$500 billion stampede in money markets" story. The Journal writes in its "Wealth Adviser Daily Briefing: Money-Market Funds and Pessimistic Millennials" Blog, "New rules reverberate across money-market industry. New rules governing cash parked in money-market mutual funds in 401(k)s or similar plans are set to hit in October. But the $2.7 trillion money-market industry is already being upended as nearly $500 billion has moved into, out of and among these funds, writes WSJ's Unhedged columnist Ken Brown. The new rules are meant to prevent another run on the industry, which occurred after a fund that held Lehman Brothers debt collapsed. Money-market funds were never supposed to lose money, and in the ensuing panic, investors pulled nearly $150 billion from the industry in a week. That move choked off cash for U.S. companies and global banks, threatening to deepen the crisis. The rules will cause two big changes: Prime funds have to hold more super-short-term debt, and they can no longer claim that investors won't lose money. More than $420 billion has been pulled out of prime money-market funds this year, dragging assets below $1 trillion for the first time since 1999, Mr. Brown writes, citing data from the industry trade association Investment Company Institute. The money has flowed into government money-market funds, which have grown from $991 billion to $1.5 trillion." (See our News Friday at the bottom for more on this WSJ article.)
