<p>If it is true, this is a scary trap for mom and posps who has invested in 401ks.</p>
<p>Here’s the whole story: [UPDATE:SEC</a> Money-Market Rule Requires Value Fluctuation Disclosure](<a href=“http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201001271146dowjonesdjonline000534&title=updatesec-money-market-rule-requires-value-fluctuation-disclosure]UPDATE:SEC”>http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201001271146dowjonesdjonline000534&title=updatesec-money-market-rule-requires-value-fluctuation-disclosure)</p>
<p>college, moms and pops probably don’t have their 401k’s invested in money market funds. I was going to accuse you of spreading financial panic, but what you say is true, and in my opinion very bad policy. If this is an accurate quote of Schapiro, it is appalling! “The halting of redemptions will stem the motivation for runs.” What??? You don’t stop the motivation for runs by not allowing people to withdraw their funds. If it was that easy we would not need the FDIC or the fed. If lines get too long at a bank… just lock the doors and tell the people in line to go home because they can’t have their money. This is actually the way runs are caused, not prevented.</p>
<p>I’m not keeping much in my money market fund, since it’s paying a whopping 0.03% yield, but I can’t imagine a big company like Vanguard doing this. I agree that the quote is nuts - suspending redemptions to stop runs!</p>