Thursday, October 09, 2008

Dunder Mifflin?

I'm feeling kinda smart. On September 25th I had a little voice inside tell me why don't you have a look at your 401k?

I hadn't even logged in years. I didn't even know the password, or as I found out later, the username.

What triggered my little adventure into the land of finance was the fact that the President, a life long conservative and Republican, became a socialist overnight. the Government needs to step in? I thought "what did he see that scared the crap out him so bad?" It had to be something....

I moved my 401K into the most conservation plan my company has. Don't get me wrong, I've lost money, it's just not as bad as it could have been.

Today I found out what it was.

I had never heard of the Commercial Paper Market. Today I asked around at work. No one else knew what it was except Tom from Finance. He used to be in Treasury, he said. My favorite answer was "does it have to do with Dunder Mifflin?". Dunder Mifflin being the fictional work place of the TV show, The Office.

No, no Dunder Mifflin here. The Commercial Paper Market is where just about every company in the world goes to buy and sell money. Borrowing money they might need for today and lending surplus. It's a very mundane chore usually carried out by by the CFOs minions.

It's a Money Market. One that is never expected to make wild gains nor have bloody losses. Not a crazy deriative or Credit Default Swap or Mortgage backed security. A Money Market.

On the 15th of Sept, a Market called The Reserve did the something that scared the crap out of everyone. It "broke the buck". For the first time, businesses that put a dollar into the fund did not get a dollar out. Read about it here.

Once again the guys over at This American Life have done an excellent job explaining the whole thing is simple terms that everyone can understand. It is not boring I swear. Check it out.

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