Home Depot, China And The Broken Buck

Looking back, it was one of those things that made things go from bad to really bad.

After the government let Lehman Brothers go under, a big famous money market fund (the Reserve Primary Fund) which had lent money to Lehman "broke the buck." That means that everyone who had invested a buck in the fund and expected a little interest back were learning instead that the investment was worth less than a buck.

Those investors lost money. And that was never supposed to happen with money market funds.

As a result, money market funds got more skittish with their investments, which is one reason lending froze up. (Listen to The Week The Economy Almost Died)

So who were the investors in that ill-fated fund? According to court documents, Home Depot was one. The Chinese government apparently also.

Home Depot, China and others say they asked for their money back before the fund went into lockdown.

There is now a lawsuit over whether certain companies got a tip-off that things were going bad.

It's unclear if China will get all its money back.

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