Reduced Yield Evaporates Paper Wealth.Don't look now
Don't Look Now is an Anglo-Italian thriller, directed by Nicolas Roeg and released in 1973. It is based on a short story by Daphne du Maurier. , money-fund investors, but the Federal Reserve has just plucked pluck v. plucked, pluck·ing, plucks v.tr. 1. To remove or detach by grasping and pulling abruptly with the fingers; pick: pluck a flower; pluck feathers from a chicken. $10 billion from your pockets. Where did I get this disturbing information? It was easy. All I needed was a few minutes reading the latest monetary-policy news and a quick calculation of the sort journalists, social scientists and political speechwriters perform all the time. Let's see Let's See was a Canadian television series broadcast on CBC Television between September 6, 1952 to July 4, 1953. The segment, which had a running time of 15 minutes, was a puppet show with a character named Uncle Chichimus (voice of John Conway), which presented each , in back-to-back moves at the start and end of January, the Federal Reserve slashed key short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. by a full percentage point, right? We say "key" rates because they set the pattern for all rates on short-term interest-bearing securities, a category that comprises everything that money-market mutual funds buy. When money rates decline, money-fund yields must follow like a shadow a few weeks later. Count on it. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Investment Company Institute, individual investors have $1 trillion socked away in retail money funds. Reduce the annual yield on that investment by one percentage point, and there you have it -- $10 billion down the drain! It's remarkable, when you think about it, that these people haven't put up a peep of protest. Perhaps they're ignorant, or too passive -- in need of an aggressive advocate to give their cause a proper hearing in our culture of competing interests. Or there's another possibility. Maybe fund investors recognize my $10 billion number as an "unanchored statistic statistic, n a value or number that describes a series of quantitative observations or measures; a value calculated from a sample. statistic a numerical value calculated from a number of observations in order to summarize them. ." Unanchored numbers, though true as far as they go, are rank deceptions because they don't go far enough. Not a penny of that "lost" $10 billion in yield ever existed. Money rates always fluctuate, As any business manager or investor will testify, you can finance worlds of fantasy with wealth that might have been. In the real world, it's worth nothing. Unanchored numbers are great for special pleading SPECIAL PLEADING. The allegation of special or new matter, as distinguished from a direct denial of matter previously alleged on the opposite side. Gould on Pl. c. 1, s. 18; Co. Litt. 282; 3 Wheat. R. 246 Com. Dig. Pleader, E 15. . With my $10 billion statistic and a soapbox, I could set myself up as a voice crying in the wilderness for money-fund investors everywhere. In this school of political economics, to give somebody $10 billion you have to take it away from someone else. At times, it appears that all federal-government budgeting is done on this model. |
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