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Friday, June 22, 2012 – Something About Mary – by Sinclair Noe

DOW + 67 = 12,640SPX + 9 = 1335NAS + 33 = 289210 YR YLD+.05 = 1.67%OIL + 13.92 = 92.12GOLD + 7.10 = 1573.30SILV +.02 = 27.00PLAT – 4.00 = 1441.00Over the past couple of weeks, we’ve paid attention to Jamie Dimon’s testimony on Capitol Hill. You might not have noticed the testimony of Mary Schapiro before the Senate before the Committee on Banking, Housing, and Urban Affairs. Schapiro is the Chairwoman of the SEC. Her testimony was a frank warning on the vulnerabilities of the money market fund system. You may remember that in September 2008, money market funds broke the buck; there was a run on funds held in money market accounts that was only staunched by a $3 trillion dollar guarantee from the Treasury and the Federal Reserve. Breaking the buck was a key part of the financial crisis. There were profound implications for a reputedly rock solid investment. The effects rippled throughout the economy as investors were shortchanged and sponsors were squeezed as they were forced to shore up valuations. Could we see another run on money market funds? We already have. It happened one year ago, a small scale run. And yes, it could happen again. And just because the run was stopped in 2008 and 2011, it is no guarantee another run could be contained in the future. There has basically been no reforms to prevent or control a future money market fund run. Here’s part of Schapiro’s testimony:“Given the role money market funds …

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