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<p>[QUOTE=&quot;doug5353, post: 2242190, member: 73555&quot;]OP, from your article, here&#039;s the key:</p><p><br /></p><p>&quot;Money market funds invest in very short-term, liquid debt such as U.S. Treasurys and offer investors low volatility, meaning they are often thought of as a cash-equivalent.&quot;</p><p><br /></p><p>With so much uncertainty in the marketplace and so much confusion at the Fed, big money doesn&#039;t want to park capital in long-term instruments, so they deposit in the money market funds.&nbsp; If we see a spike in interest rates, bondholders suffer sizeable losses, as the two instruments move in opposite directions.</p><p><br /></p><p>In short-term instruments, maybe only running a period of weeks, the loss is minimal, as they pay off at par, whereas you can&#039;t wiggle out of your loss in a 10 or 30 year bond, because they are paid off far in the future.</p><p><br /></p><p>To mega-institutions, a bond market crash would be MUCH more harmful than a stock market crash.&nbsp; Unfortunately, it&#039;s the middle class, you and me, that loses big-time in a stock market crash.&nbsp; In the past century, the huge fortunes were made in bond trading, not stocks.[/QUOTE]</p><p><br /></p>

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