Advisories

Given the current economic environment, we remain highly attuned to the risks of investments that don't have the benefit of an explicit government guarantee

Amidst all the chatter over the pros and cons of the various government sponsored programs to cure the financial markets, it is worth noting that some of the targeted programs have produced positive results by any standard.

Since September 7, 2008 when the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac (the "twins") into conservatorship, there has yet to be any serious public debate regarding the government's next steps.

Quantitative easing (QE) was the name given to the Bank of Japan's activities to stimulate their economy after they hit zero overnight interest rates.

Since when has "return" been a dirty word? Investors are in great pain these days, particularly in the money market arena.

On October 14, 2008, the Federal Deposit Insurance Corporation (FDIC), together with the U.S. Treasury and Federal Reserve, announced the establishment of the Temporary Liquidity Guarantee Program (TLGP) to help restore market confidence and encourage liquidity in the banking system.

Mounting prosecutor evidence of misrepresentation and malfeasance in the sales and marketing of Auction Rate Securities (ARS) will pressure the major broker- dealers to ultimately make most of their affected clients whole.

During the current, unprecedented turmoil in the corporate cash markets, it is important to take a step back and investigate how today's liquidity issues occurred and what treasurers, CFOs and other corporate cash investors can do to prevent a relapse in the future.

In light of mounting financial pressure against Fannie Mae and Freddie Mac, and a quick series of federal steps this weekend aimed at supporting the two government sponsored mortgage giants, SVB Asset Management wants to provide our clients a clearer perspective of the situation, especially with regard to the general safety of agency investments.

Returns for our clients who invest primarily in short-term securities are driven mostly by Fed policy.