BofA money market fund dives 70%

Bank of America shuts new investors out of money fund--recently worth $40B -- citing credit crisis.

Global credit crisis batters Columbia Strategic Cash Portfolio fund.

CHARLOTTE, NC (AP) -- Bank of America is closing off an enhanced money fund to new investors amid withering losses on complex asset-backed securities, the bank said Monday.

The Columbia Strategic Cash Portfolio fund for institutional investors that was worth $40 billion only a couple months currently has about $12 billion in assets, Charlotte-based bank said.

The loss is related to the subprime-mortgage crisis that has rippled across the globe, Bank of America spokesman Jon Goldstein said.

"The conditions have really weakened the performance across the industry, including this one," Goldstein said.

The enhanced money fund was a short-term investment pool that offered higher yields than a traditional money-market fund.

Unlike traditional money-market funds, the Strategic Cash fund didn't offer investors a guarantee that it would maintain a $1-per-share net asset value, although the fund was managed toward that goal, Goldstein said.

The Strategic Cash portfolio was open only to investors with a minimum of $25 million or more.

Link: http://money.cnn.com/2007/12/10/news/companies/boa_trouble.ap/index.htm?postversion=2007121014

When money market funds go tits up, that some bad juju.

i know it will be extremely difficult for them but somehow i think they will survive

a couple of other big banks are bankrupt.

No matter what the Fed does today, it's probably not going to be enough to save us from complete economic collapse.

and money gets cheaper, the dollar is worth less and less. Cutting interest rates is the lesser of two evils. Low interest rates were the root of the greed that caused the mortgage and housing bubble and bust. Now with the declining dollar, lower interest rates cause a cheaper dollar. But raising interest rates would accelerate the crash. There's becoming fewer reasons for foreign capital to find it's way to the US for investment. Capital will always seek out where it will get the greatest return. And we're nearing the point that the better returns are to be found elsewhere than the US.

They ain't gonna come when the money they send home is worthless.

So does this mean that someone who invested the $25M minimum last year now has an investment worth $7.5M? That's gotta hurt.