Money Market Funds closing / / / / yes

Putnam Investments LLC closed its $12.3 billion institutional Putnam Prime Money Market Fund yesterday and plans to return all cash to investors.

The fund, which was valued yesterday at $1 a share, experienced ``significant redemption pressure,'' the Boston- based company said in a statement. A drop below $1 a share, known as breaking the buck, would have exposed investors to losses.

The fund had no exposure to securities issued by Lehman Brothers Holdings Inc., Washington Mutual Inc. or American International Group Inc., the company said.

Reserve Primary Fund, the oldest U.S. money-market fund, on Sept. 16 became the first in 14 years to break the buck. Investors pulled 60 percent of their money from the $62.6 billion fund on Sept. 15 and 16 before withdrawals were delayed.

Putnam is a unit of Canadian insurer Great-West Lifeco Inc.

VIX indicates a bottom is very near

Investors paid up for protection from further losses. The Chicago Board Options Exchange Volatility Index jumped 20 percent to 36.22, the highest closing level since October 2002. The VIX measures the cost of using options as insurance against declines in the S&P 500.

Buchon Brothers update

Jim and I have a website now where you can learn about us, our music and upcoming gigs on the Central Coast click here

Don't you love these downgrades???? Their timing is exquisit . . .

Standard & Poor's downgraded the ratings of Washington Mutual Inc. today (2.00, -0.73, -26.7%) and Washington Mutual Bank because of increased market turmoil. Now get real, this company once sold for as much as $47 during the last two years and NOW it gets downgraded?

Capitulation?

Probably not . . . As of Monday evening, for example, the HSNSI (Hulbert Stock Newsletter Sentiment Index) stood at minus 33.2%. Though that suggests that the average short-term timer is bearish, he is not nearly as bearish as on past occasions of capitulation. The all-time low for the HSNSI, for example, is minus 81.8%--or nearly 50 percentage points lower.

Lehman owes . . . .

New York-based Lehman, which filed for protection from creditors today, owes its 10 largest unsecured creditors more than $157 billion, according to the Chapter 11 filing today in U.S. Bankruptcy Court in New York. The largest single creditor is Aozora Bank Ltd. in Tokyo, with $463 million in a bank loan. Other top creditors include Mizuho Corporate Bank Ltd., owed $382 million, and a Citigroup Inc. unit based in Hong Kong, owed an estimated $275 million, according to the filing.

Cubes

an fun site to just amuse yourself click here

Aaron Sorkin on the internet . . .

"Nothing has done more to make us dumber or meaner than the anonymity of the Internet."

Buchon Brothers music gets better

Jim Thurman and I, The Buchon Brothers, played 11 songs last Saturday night at a local club in San Luis Obispo (8 of the song were original compositions) and received rave reviews from the audience. It was the first time we've played in front of a serious audience without music stands and we did well, hitting 90% of our marks. Click here and you'll be taken to my website where you can hear two songs from last night's show craigkincaid.com/music

The Journey of Mankind . . . click here

FDIC needs some bailing out?

Yep, another financial "biggy" is having problems . . .

FDIC Chairman Sheila Bair said her agency might have to borrow money from the Treasury Department to see it through an expected wave of bank failures. She said the borrowing could be needed to handle short-term cash-flow pressure brought on by reimbursements to depositors after bank failures.

The FDIC issued a report showing that the number of financial institutions on its so-called problem list rose to 117 from 90 which were reported at the end of the first quarter.

That's an increase of 30% in three months, and things look to get worse before they get better. The number of banks on the list is the most visible thing to consumers, but the amount of assets held by those problem institutions is more troubling still. The total assets of institutions on the problem list tripled. That means some pretty big players are in the additions.