A money market deposit account, on the other hand, is entirely different. It is an interest-bearing bank account that is insured -- up to $100,000 per account and up to $250,000 for some retirement accounts -- by the Federal Deposit Insurance Corporation. Joint accounts are insured for $100,000 per account holder.
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What about SIPC? How safe is that?
Even though I've always been a libertarian, I've also been a left-liberal when it comes to the economy.
The private sector needs to be overseen and regulated by a democratically-accountable government. It's up to the citizenry and media to make sure our politicians aren't corrupt.
What does this have to do with money markets? If private institutions are "too big to fail," they need to be regulated better and in a smarter way. They also need to be taxed to create an emergency bailout fund.
We need better regulators and regulations. I know businesses will complain of overbearing government but too bad.
Obama will do a better job at this than McCain, who will just appoint the same sort of regulators as Bush did the last 7-8 years.
Obama is pro-free market but he recognizes that markets fail as they have been doing recently in an extraordinary fashion.
Peter K,
Even though I've always been a libertarian, I've also been a left-liberal when it comes to the economy.
This is nonsense. A libertarian is a person who advocates liberty. A left-liberal when it comes to the economy is a person advocating violence and coercion.
Avner, see the previous post, which explains the SIPC.
The New York Times gets it slightly wrong: it's up to $100,000 per institution, not per account (sort of).
Let's say you're married and you have three accounts at Bank X, one in your name, one in your spouse's name, and one in both of your names. The individual accounts are insured for up to $100k, and the joint for up to $200k.
But you can't just open up another individual account at Bank X and have it also be insured up to 100k.
So, if you're going to keep that much cash in bank accounts, spread it amongst several banks. Having 300k in one bank spread across several accounts all in your name means you might lose a whole lot of money.
Also note, the FDIC has lately been giving people 50% of everything over what they guarantee (IndyMac, NetBank, etc, all got this). But don't count on it.
-Ed (who has already gone through one bank failure in the past 12 months, and currently has money at WaMu)
Ed,
If a person has more money to save than FDIC levels, they should save at a CDARS institution. Through this magic wand, they can get FDIC coverage for up to $50m.
http://www.cdars.com/index.php