I agree this is the most shocking financial news of the day. Is this just the tiop of the iceberg in money market finds" breaking the buck"? I think this is really serious and has totally eroded my confidence in the orderly unraveling of the credit mess the markets are in.

So just what is safe now? I don't know who to trust with my money. I use Wells Fargo because they seem to be OK for now, but who knows tomorrow? FDIC? Well  now it seems they may need more money from the government to keep going. That Indy Mac bank failure really flattened them out. May be a coffee can in the basement may be a better place for your money. A year ago I would have said that this was a silly idea, but may be not now, since when taking inflation in to account and the low interest plus paying taxes on the interest, It's a toss up.

The thing is our Vanguard 401k does not have a real cash option. I would think most company 401k's don't. Early last summer  I went to the Vanguard web pages and looked up the holdings of each index and money market fund in our plan. There was no where to hide that didn't have financials laced through them. .So we bit the bullet and paid 125 a year for the permission to open a vbo on the inside of our 401k. It's a brokerage side . You can call and have them transfer money from the index side to the vbo and then trade like an on line broker account. Similar to my Scottrade account. What really angers me is that the fee per trade is 25.00 and they have NO tic page and poor graphs. Then what do you buy to feel safe? The holding money market on that side is Wells Fargo.which gives me the chills.

So I bought treasuries on the secondary market from the vbo and have hid there until expiration tomorrow. Now I have to decide if I roll it over or chance Wells.

The rules here like everywhere are to benefit the banking system itself and the choices most Americans have in 401k's are so limited it's sickening.

Now investment banks are going to get access to our deposits by being attached to our personal banks. GREAT they can blow through out deposits and the during the next bubble or credit mess they will burn through our tax dollars on the bail out ;oh but we will be allowed to earn less than 2 % on our own money while they leverage it out around the world.

So lets all vote for more of the McSame. Same old party. Same old McPain.

Democrats created Fanny Mae and Freddie.  Both parties are horrible on this.

Any Comments on the following --

T. Rowe Price:

Is the TRP money market fund we chose for the plan going to be ok?  It invests 80% of its net assets in mortgage backed securities issued by the Government National Mortgage Association (GNMA), and agency of the Department of Housing and Urban Development.  The securities represent pools of mortgage loans that are guaranteed by either the Federal Housing Administration or the Veterans Administration.

How "safe" will it be compared to the Vanguard Short-Term Bond Fund?  I read recently that all the short-term bond funds were into Fannie Mae and Freddie Mac in a big way..........haven't been able to check the Vanguard's fund's exposure or find out how it might be affected.

I don't know about anyone else but this government taking over AIG is not good.  Part of what makes this country a democracy is the fact that government does not own businesses.  If you look at Mexico, their government owns 50% of all businesses.  Do we want to become like these other countries?  I hope that our next president can figure out all of this mess!

Too many people are in the money business. They don't make anything, they just push money around for big fees. Some time this group needs to get smaller. The deals they cooked in the long run weren't worth eating.

lizann, Vanguard does have a money market fund based on US Treasuries, VMPXX.  Unfortunately your 401k may not have that as an option.

If it's not, call your 401k representative in Vanguard and _very_nicely_ ask if it can be added to the list of options.  Don't expect an immediate change in policy, but you never know, it might get the ball rolling.

I think it best for me at this point to stop reading this stuff.   It'sway too scary for me.

Best to all.