Money Market Funds

Much has been written on money market funds this past two weeks....and the record setting run on them and into short term treasury bills. This is important to understand why and the ramifications for the stock market.

1) Institutions that were parking hundreds of millions of dollars of their cash had no idea what their "cash" was invested in...look at the debacle at CCJ today. The 30 day "asset" backed commercial paper is not being repaid. How a CFO can make that mistake shows incredibly poor judgement and very poor advice by their bankers. This continues our theme...know what you own and how you own it.
2) People and many companies have trillions of dollars "invested" in short term paper this way and they are learning an important lesson this week.
3) This idol cash has been viewed as passive income and a safe place to be....this is not true and now this cash will find a new home like treasury bills.
4) This will also help stimulate the future action of this cash going forward...as it will earn less.
5) This will force the cash to either be invested in their business, increase dividends and or buy back more corporate stock.
6) This cash sitting with investors will also be coerced to work harder for its owners and will be put to work back into the stock market...this is one of the consequences of lowering interest rates that everyone seems to be craving right now....why sit in "money markets" when you can now get a higher yield in GE for example.

Bet on the management not on the pony...great company managements have the following in common:

1) They're fully invested in their own company.
2) They have well articulated long term plans.
3) They communicate well.
4) They execute.
5) They're ethical.
6) They push.
7) They have balance.
8) The hire right.

These are the traits of super blue chip, over capitalized companies, too big to fail, that are in leadership positions on a global scale.

Danny Boy seen here knows this is were he wants to be.