i don't think you have to worry about them going bankrupt since they have been overhauling their company. They had large pension defecit which made them reorganize some areas and to close some plants down and cut jobs. I think you'll be safe.

Thats interesting. While its not technically risk free, its very nearly so. At least for those who dont ignore public events for weeks on end.

In fact, I may swap some of my ING funds there.

Wish they had a bonus.

Do any of the bond experts out there have an opinion on this ?



HOW SAFE IS MY INVESTMENT?

Ford Money Market Account is a direct obligation of Ford Motor Credit Company, a wholly owned subsidiary of Ford Motor Company.

WHERE DOES MY MONEY GO?

Your funds are used to purchase Demand Notes issued by Ford Motor Credit

I disagree with the characterization on the other thread that it is a "junk bond".

Its NOT subject to value changes like a bond would be.

A small investor could easily take his money out if he sees Ford Motor Stock go down a certain amount.

In short, I seriously doubt there is any real risk. I just dont see them defaulting on a small investors money when they have a marketcap of $20 BILLION !

I would say invest in it, and then watch the stock. If it falls in half, to $5.50, consider pulling out.

It DOES offer advantage over junk bonds in that you can ACH money in and out and write checks.

Say Ford has tough times ahead and fall to a mere $5 BILLION company, chances are they wont default on such small fry money. Small fries who are also car buyers.

ummm earth to mr optimist...ford also has over 150 BILLION DOLLARS in long term debt. notice how their market cap is at 20 billion while their cash on hand is just under that amount!! this company is being valued at just face value because of their high risk and enormous debt load

http://biz.yahoo.com/p/f/f.html

BBallfan2003 said:

<< In short, I seriously doubt there is any real risk. I just dont see them defaulting on a small investors money when they have a marketcap of $20 BILLION !
>>

Sounds like you ford bears can get mega rich shorting ford ! LOL

wooohooo! Great post DeGlass!

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The question is, what are you really buying?

Are you buying Ford's debt?

Or are you buying the debt of Ford Credit, which finances all those car purchases?

I think it may be the latter... in which case, you're basically investing in people's car loans. If this is the case, the financial state of Ford the company won't matter as much,

Not worth it. You take on extraordinary risk for a mere 0.5% in extra yield. Netbank, ING, and some others offer 2.0% with FDIC insurance. Guys like Vanguard offer money market accounts that are not FDIC insured, too, but their investments are diversified and consist primarily of Treasury bills and commercial paper from many high quality companies. Ford is just one company and its financial strength is suspect.

For Week Beginning September 22, 2003
Amount Invested Ford Money Market Account

Rate Yield
Up to $14,999 2.50% 2.53%
$15,000 to $49,999 2.65% 2.68%
$50,000 and Above 2.80% 2.84%

Q:How safe is my investment?
A: Ford Money Market Account is a direct obligation of Ford Motor Credit Company, a wholly owned subsidiary of Ford Motor Company. It is not a diversified investment and is not FDIC insured.
Text

Ford's Money Market account is not a Money Market Mutual Fund. Unlike a MMMF, your investment is not diversified through investments in different companies' short-term bonds and notes, Federal, state and local short-term debt issues, jumbo CDs and similar money market instruments. Your investment is only used by Ford and its captive finance subsidiaries.

There are some FDIC-insured savings products offering yields up around 2.0%. Those are a safer bet than the Ford Money Market, but the choice is yours.

I'm sorry to be ignorant. But can anyone tell me how can a consumer buy the government I-bonds? Can I withdraw my investment at any time? Is it possible that I could lose my principles? How much is the transaction charges?


>>I don't understand, aren't you a lot better off buying government I-bonds which currently give a 4% or better return? I think the gains are tax deductible too?