Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Vanguard tax-exempt MM
Old 09-27-2008, 09:37 AM   #1
Recycles dryer sheets
 
Join Date: May 2006
Posts: 98
Vanguard tax-exempt MM

Has anyone noticed that Vanguard's tax-exempt MM yield has blown out to a yield of 5.3%? I see 90%+ of the holdings are rated MIG-1, the best short-term rating possible.

Is this just a result of the current credit crunch? Anything to be concerned about parking money here for awhile?

I never thought I'd see their tax-free muni bond MM paying 3% more than the Prime MM fund...
__________________

__________________
cyclone6 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-27-2008, 01:32 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,620
Lots of people have noticed ... even Vanguard itself. This is a temporary blip. See Bogleheads :: View topic - VMMXX (prime) MM vs VMSXX (tax exempt) MM
__________________

__________________
LOL! is offline   Reply With Quote
Old 09-27-2008, 05:27 PM   #3
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
I'd start worrying about some municipal bonds and short term debt. As the financial issues worsen, states and cities with high levels of financial industries (New York, New Jersey, California, amongst others) are seeing a reduction in tax revenues. New York is going to have a special legislative session to adjust to major revenue losses from the recent bankruptcies. Their bonds will be at risk in a protracted credit crunch. Politicians will be reluctant to cut spending to cover bond holders until it actually collapses and maybe not even then. Historically, municipal bond defaults get real ugly real fast. You can't count on the "insurance" that has faulty credit standing either.

Hey, aren't you one of the people that think we don't need a "bailout?" Then it will be good that market forces work their magic.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-27-2008, 07:57 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,620
Bogleheads :: View topic - An explanation on the muni markets disarray is another link with interesting news/facts.
__________________
LOL! is offline   Reply With Quote
Old 10-10-2008, 08:06 PM   #5
Full time employment: Posting here.
 
Join Date: Nov 2005
Posts: 829
Latest update: VG Tax-Exempt Money Market is down to 4.56% from a peak of 5.5% a few days ago. I hope that the downward trend continues.
__________________
socca is offline   Reply With Quote
Old 10-11-2008, 08:16 AM   #6
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by socca View Post
Latest update: VG Tax-Exempt Money Market is down to 4.56% from a peak of 5.5% a few days ago. I hope that the downward trend continues.
I'm with you on this. The high interest rate shows how constipated the municipal money market is. If it drops to a "normal" level of under 3%, that's a good sign on the credit markets unfreezing.

The people jumping into these great interest rates will hopefully only see them for a few weeks. Then we can start having posts complaining how they're now being screwed.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 10-11-2008, 08:34 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Theres going to be some real complaining if a few cities and towns default on their short term obligations because they cant get any cash flow.
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Vanguard Tax-Exempt Money Market (VMSXX) Yield = 4.46% tulak FIRE and Money 18 09-25-2008 09:07 PM
Vanguard Long Term Tax Exempt Insured Fund lawman FIRE and Money 2 09-24-2008 04:16 PM
tax-exempt dividends/income (and Turbotax) JohnEyles FIRE and Money 3 02-06-2007 06:06 PM
Vanguard tax-exempt MM at 2.6% pre-tax soupcxan FIRE and Money 17 12-28-2005 10:13 AM
Tax Exempt Bonds Mountain_Mike FIRE and Money 3 06-20-2005 05:07 PM

 

 
All times are GMT -6. The time now is 04:15 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.