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9:00 AM EST, Tuesday, October 28, 2008: Dumb. Dumb. Dumb. Find me an investor with money in a money market fund. He'll swear to me that his money is 100% safe because it's insured by the Feds. Let me disillusion you: It's not. Here's what the Department of Treasury says on its web site:

The U.S. Treasury Department has established a Temporary Guarantee Program for Money Market Funds. Under this program, the U.S. Treasury will guarantee to investors that they will receive $1 for each money market fund share held as of close of business on September 19, 2008.

If you put money into your favorite money market fund after September 19 (like yesterday, for example) it is not insured.

This does not mean that all money market funds will "break the buck," i.e. lose you money. It means that if you have money with a fund, you'd better check what it invests in. Remember Alice? A word is anything I want it to be. Your money market fund could be a safe money market fund, investing only in treasuries or it could be an unsafe money fund investing in everything from good corporate bonds to bad corporate bonds.

In short, Check, Check, Check.

The only safe investment today is U.S. Government treasuries. They're yielding basically nothing because everyone is fleeing to them. Why the Federal Government doesn't extend its insurance program on money market funds is beyond my brain to figure. I refer you to yesterday's column which included a small section, "The government is seriously mismanaging this crisis."

This bear market is spiraling even lower: Call it forced selling. Call it indiscriminate selling. Call it desperation. Whatever you want. People and institutions are dumping what they own. (There are always short-term "pops" in bear markets. I see futures are up this morning.)

The latest selling comes from Calpers. This news is important because it's the biggest. It's selling because it must -- because it doesn't have enough cash. Remember my lectures about "Cash is King." Read the story from yesterday's Wall Street Journal:

Calpers Sells Stock Amid Rout to Raise Cash for Obligations
By CRAIG KARMIN and JOANN S. LUBLIN

The nation's largest public pension fund, known as Calpers, is unloading stocks in a falling market to make sure it has enough cash to meet its obligations.

The pressures come as the California Public Employees' Retirement System has had to raise cash to fulfill commitments to private-equity firms and real-estate partners. The giant fund's predicament is another sign of how the market selloff is tightening the screws on pension funds nationwide. Many other pension funds have similar partnerships and could also confront liquidity strains.

Members of the board investment committee at Calpers held a closed-door session on Monday and discussed ways to raise more cash, according to people familiar with the matter. The issue was brought to the attention of the committee after members of the investment staff expressed concern, a person with knowledge of the matter said.

Typically, Calpers keeps less than 2% of its assets in cash, but the recent demands have forced it to raise that level.

"Calpers receives more than enough cash from employers and members to cover its monthly benefit obligations" to retirees and other beneficiaries, a Calpers spokeswoman said Friday.

Under normal conditions, pension funds count on some private-equity partners to distribute investment gains, while pensions owe some partners more capital. During the recent market selloff, however, distributions have dried up while capital calls continue. That's created a mismatch and a cash strain.

Since the credit markets have tightened up and real estate and alternative investments aren't very liquid, Calpers has been compelled to sell off stocks to raise large sums quickly. Those sales are turning paper losses into realized losses.

Calpers said it had $188.8 billion under management as of Wednesday, down 21% from the end of June. The fund, which said it had about 63% of its assets in global stocks at the end of August, has been punished severely by the stockmarket selloff.

Critics say that some of Calpers's troubles are of its own making. The pension fund is the main investor in a partnership that is expected to lose much of its nearly $1 billion investment in LandSource, a venture that owns thousands of acres of undeveloped residential land north of downtown Los Angeles and that filed for bankruptcy protection in June.

The pension fund also has been without two of its top leaders, the chief executive officer and chief investment officer, since they resigned at midyear. The fund has been operating with interim people in those key positions.

Calpers initially tried to fill the CIO spot first, but without any luck. A former fund official said that candidates were reluctant to take the job while the permanent CEO position remained vacant. Calpers is now focusing on landing a CEO first, recently hired a search firm and hopes to have its new leader in place by December, people familiar with the matter say. The fund intends to have a CIO by no later than February.

Anne Stausboll, a politically well-connected attorney and the former California chief deputy treasurer, is serving as interim CIO. She appears to be the only top Calpers official vying for the CEO job, according to people familiar with the situation. She doesn't have the investment experience that is common for a CIO of a large fund, which critics say puts Calpers at a further disadvantage during this particularly severe market crisis.

"Calpers's investment office is being capably managed by our interim CIO and her team of seasoned investment professionals," the spokeswoman said.

Calpers counts 1.6 million former and current public employees as members whose benefits are contractually guaranteed. If the fund suffers large investment losses, it has little choice but to hit up employers -- such as cities and counties -- to increase their contributions. Calpers recently indicated plans to raise the contribution level starting in 2010 and 2011, unless the recent investment losses can be reversed. The fund estimates that employers would have to pay an additional 2% to 4% of their payroll to Calpers if the June fiscal year ends with returns of negative 20%, which the fund recently hit.

Should I redeem my hedge fund? Many investors have stuck by their hedge fund/s, believing that their hedge fund manager was smarter than the rest. It's true some have performed better than others. Here's a chart to compare yours against:

This chart is not comprehensive. It only reports on those hedge funds which reported. The ones doing really badly did not report. Some hedge funds also are up mightily this year. They're the ones that saw the contagion coming and sold short or bought financial instruments that worked when disaster came. What you learn from this inadequate chart (the best I have) is that some hedge fund "styles" have done better than others. I talked to a hedge fund manager yesterday. He's a value investor, a "fundamentalist." As he freely admitted, "my skills are useless in this market of great values, but indiscriminate selling.

An amazing statistic: Yesterday the Japanese Nikkei hit a 25-year low. That means that if you had owned an index fund mirroring the Nikkei from 1983, you would have seen absolutely no gains. This is a frightening statistic. No wonder the Japanese put their money into the U.S. Their society is a mess. They don't make sufficient babies. They don't allow immigration. They're getting older. A friend quipped to me yesterday, "Do the math. In 400 years there'll be one person in Japan."

There's money to be made in shorting. I've harped on the ProShares UltraShorts. But they also, for the more conservative, have Shorts. ProShares has a 162-page October 1 prospectus out, which is actually quite useful.

You don't need index funds to short. You can pick a sector that's doing awfully -- e.g. cars. appliances, retailing. steel, coal, commodities and short your favorite misery. Cramer last night was surprisingly negative on U.S. Steel, almost begging his viewers to short U.S. Steel, even at its present depressed level.

Check your clocks and your computers. Daylight savings time hasn't happened yet. But some of my computers and some of my "wireless" clocks think it has. Why our wonderful government screwed around with -- of all things -- daylight savings time -- is beyond me. Congress clearly has some of the world's stupidest people. Today I read that Senator Ted Stevens of Alaska is guilty of failing to disclose $250,000 of gifts. A miserable $250,000 and the guy is going to lose his 40-year Senate seat and probably go to jail as well. You have to be a total idiot! For what purpose?

I'm from the Government. I'm here to help you. My friend Dan has alerted me to the world's funniest video. It's clean, tasteful and very funny. It teaches you, in simple, helpful language, how to install your new TV converter box. Click here.

Great quotes:
Politicians are a lot like diapers.... they should be changed frequently and for the same reason. -- Robin Williams.

Great new camera: There are three types of digital cameras. First, the tiny point and shoots. Second, the heavy single lens reflex. Third, the new "in-between" line, as best exemplified by Canon's new G10. There is no single camera for all seasons. For traveling light, I recommend the new $300 Canon SD880. I have written about the SD850, which I own and love. The SD880 is an updated version. There is also a $400 SD990. But you don't need it.

The best in-between line camera is the Canon G10 with a $465 street price. It's bigger and heavier than the SDs. You can still carry it in your pocket. But it has some huge advantages. (Think of it as an Leica rangefinder.) Some specifics: No shutter lag (if you remember to pre-focus). Lots of external controls. Custom and manual setting, allowing you to tweak your photos to perfection. Big optical zoom. Huge 14.7 megapixels. A hot shoe for an additional flash. (The on-board flash is puny.) And -- one thing I really love -- you can take movies, as long as one hour, in remarkably poor light.

Canon G10 front

G10 back. Note huge 3" screen.

G10 from the top. Note the three useful knurled controls -- for adding or subtracting exposure, ISO and mode changing.

I'm having a ball playing with my new G10.

Watch the video. It really is funny. Click here.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.