Mary Schapiro, overseer of all things “corruption” at the top of America’s market regulatory hierarchy pyramid has been highlighted in a Bloomberg Businessweek article regarding the trimming of Money Market (MM) Funds.
She is correct when she states that it would be “a fool’s errand to say the right size is X”. However, at the current the rate X will equal zero and if you’re a banking cartel keen on pillaging the reserves of America’s most vulnerable population, that’s the right size.
Clearly the Retail MM Fund data provided by ICI is declining rapidly since the end of Q1 2012 compared to the Institutional MM Fund data. Notice in August of 2011 Institutional MM dropped while Retail MM jumped.
Considering that MM’s typically invest in government securities, CD’s, and company commercial paper, it’s no wonder Ms. Schapiro doesn’t want limitation on their size. Furthermore what does she care, it’s not like the MM funds are federally insured, so it’s a risk free market making opportunity.
Also, Schapiro wants the fixed $1.00 to float, contrasting the current fixed $1.00 value with a floating yield. Good luck retail and unsophisticated institutional gamers.