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Wow. This seems unusual...
03-01-2008, 01:55 PM
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#1
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Moderator
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,475
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Wow. This seems unusual...
I have a couple of brokerage accounts with USAA. One is an asset management account (AMA) which I currently only use as a high-interest checking account with about half of our emergency fund in it (my primary brokerage accounts are with Schwab). I also have a small Roth IRA there.
In the Roth IRA I have the cash swept into the regular USAA money market fund. The AMA is swept to an FDIC-insured money market fund.
I just recorded the interest for February into Quicken. The yield for the ordinary MMF came to an average of 3.106%. The yield on the FDIC-insured money market fund was...get this... 3.550%.
The insured fund paid out 0.45% higher last month! That seems particularly odd these days, given the huge premiums people are paying for security and preservation of capital.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-01-2008, 02:01 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: No Country for Old Men
Posts: 47,492
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Just wait til next month - my guess is it will drop faster than Paris Hilton's panties a falling brick.
__________________
Numbers is hard
Retired in 2005 at age 58, no pension
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03-01-2008, 02:06 PM
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#3
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Moderator
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,475
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 Quote:
Originally Posted by REWahoo
Just wait til next month - my guess is it will drop faster than Paris Hilton's panties a falling brick.
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Oh, I have no doubt that yields will keep plummeting (thanks, Ben).
But it still seems odd in any event that an FDIC-insured money market fund would yield almost a half point MORE than the uninsured option from the same company.
The "flight to safety" in terms of insured deposits and Treasuries began long before February.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-02-2008, 09:06 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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Quote:
Originally Posted by REWahoo
Just wait til next month - my guess is it will drop faster than Paris Hilton's panties a falling brick.
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She wears panties?
__________________
Have Funds, Will Retire
...not doing anything of true substance...
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03-02-2008, 10:17 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: No Country for Old Men
Posts: 47,492
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Quote:
Originally Posted by HFWR
She wears panties?
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What? You looked....
__________________
Numbers is hard
Retired in 2005 at age 58, no pension
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03-02-2008, 11:55 AM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2006
Location: Collin County, TX
Posts: 9,218
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Quote:
Originally Posted by REWahoo
What? You looked....
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He might be afraid he'll go blind.
__________________
There's no need to complicate, our time is short..
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03-02-2008, 02:23 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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Careful, it has teeth... 
__________________
Have Funds, Will Retire
...not doing anything of true substance...
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04-01-2008, 11:31 AM
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#8
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Moderator
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,475
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Just noticed that the average FDIC insured money market yield for March was still higher than the uninsured MMF -- 3.08% overall for the insured MMF compared to 2.93% for the uninsured version.
I'm not sure how this is possible, especially in this hyper-cautious environment.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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04-01-2008, 11:38 AM
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#9
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Simple explanations:
1) the uninsured MMF probably has a fair chunk of t bills in it. Yields on T bills have hit the floor and were under 1% not long ago.
2) FDIC insured MMFs are subject to competition among banks for deposits. With all the stress in the funding markets, it has been more attractive to pay up for deposits and be sure you have the funding, especially since you can just whack MM rates later when things calm down.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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04-01-2008, 11:55 AM
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#10
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Moderator
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,475
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Good point about the T-bills. An insured MMF probably doesn't need to buy them -- that would be like buying munis in an IRA. I'll bet that's a big chunk of it right there.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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04-01-2008, 12:29 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jun 2007
Location: near Canadian border and near Mexican border
Posts: 1,142
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Quote:
Originally Posted by HFWR
She wears panties?
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Not really. This is how reduces her wardrobe expenses in a feeble attempt to be a LBYM type person.
__________________
Pigs get fat, hogs get slaughtered. That's my story and I am sticking to it.
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04-01-2008, 03:10 PM
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#12
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Full time employment: Posting here.
Join Date: Feb 2008
Posts: 920
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Yeah I show USAXX at 2.92 over 7. Ouch.
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