I believe money will talk on Monday.  I read there is now a bailout of money markets in the works due to stress and redemptions.  

I believe we will know more about what the not-so-fine print in money market descriptions really mean.  The description I received for my 401K sweep account is above.  Not the mention that collateral, and credit default risks are higher with "sub-prime" mortgages.  Note the mention that Fannie Mae and Freddie Mac securities are not backed by the full faith and credit of the U.S. government.

I believe a lot of savers may have become unwitting housing lenders/investors by having their funds swept into such money markets.  As redemptions go up, a money market fund liquidates its most liquid assets.  If mortgage backed securities (MBS) are not so liquid, the proportion of MBS in money markets increase with net redemptions.

Money market funds may be repriced to represent the value of it's assets.  It may be supprising to a lot of people if the bailout consists of the government bidding for the MBS assets, thus setting a price and allowing others to bid higher.  This would create liquify a solidifed market.

My hunch is the government doesn't want the taxpayer to pay above the MBS value, and would like others bidding too.  Any party holding MBS at a discount would have an option of discounting the principle or interest of the loan, relieving stress and default rates on home loans.

This may come at the expense of savers who wanted absolutely no part in the housing market.

"As we define the path to the ultimate destination of debt destruction and price discovery, it’s incumbent on us all to remain lucid."

http://www.minyanville.com/articles/war-lehman-leh-aig-bac-merrill/index/a/18950

My step mom told me I lost big in my ultra-short because I don't have faith in the government.

Wow!  My 401K is down %29 as as a result of Thursday's and Friday's updraft and my fearful jump out of 'clogged' money markets into an ultra-short fund.  Now I am afraid of the ultra-short fund.  Hahahaha!  (Laughing at fear.) 

I'm posting the report of my unrealized loss as a way of putting the salt shaker on the table.  So everyone can take what I have said with a grain of salt.

I don't know what is going to happen on Monday.  All I have to say is 401K's which don't allow holding cash, don't allow using stop losses, and restrict only to being 100% at risk in mutual funds suck.

Running - 401Ks were designed not for your convenience or profit, but to force you to invest on the long side for as long as you able to walk.

This is one of the toughest markets I ever wittnessed, retail and pros lose money.

But, I love this kind of action, may be because I am dumb ( David Dumb Trader) - I know that I am NOT lucky, but this year was the most profitable year for me ever. ( On both sides - long and short and I don't want to brag, but as an example - Tim Knight is about 80% up for the year annualized and that performance, which is very respectful even for options trader - just makes my smile) But the price I paid cannot be measured in $$$ - I guess I shortened my life for 10 years...

But I guess things happen for a reason - after my soon to be ex's IRA account added 50% in 2 day this week (YUG long trade) - even she is starting to have some respect for me ( which is very difficult given my jerkish personality :))

 On a serious note - the only advise I can give to retail traders is not to trade now, but...where to put cash? - nothing is safe...

What is absolutely amazing is they lied about being able to withdraw with tax and penalties.  JP Morgan flat out told me they wouldn't allow it.  I feel robbed of eight years savings.

I was thinking a 401K was also a way to tax defer some money until my employer laid me off and withdraw at a lower tax rate paying tax and penalty living in Mexico.  I wish I never put a penny in the 401K.