Why did the "chicken money" cross the road? To get into a safer money-market fund.

No joke. Very quietly, and without any of the fanfare with which it was announced a year ago, the government ended its safety guarantee for money-market mutual funds. On Sept. 18, the Treasury's Temporary Guarantee Program for Money Market Funds was allowed to expire.

You might remember that a year ago, after the Lehman Brothers crisis, the huge Reserve Primary Fund suffered huge losses because it owned commercial paper issued by Lehman. When Lehman failed, its IOUs became worthless.

The basic premise of a money-market mutual fund is that one share is always worth $1 -- one "buck." But because of those commercial paper losses, the Reserve Fund "broke the buck," as the value of a share fell below $1.

At that point in the global credit crisis, it appeared there might be a run on all money-market mutual funds -- more than $3 trillion in assets, much of which is held in short-term commercial paper. So the Treasury stepped in with a guarantee for all existing money-market fund assets.

In effect, the Treasury's action gave money-market mutual funds the same guarantee that is carried by insured bank deposits: a promise that the government would not allow any losses. It kept money from streaming out of money-market funds and into banks.

Now the panic is over -- and the guarantee has ended. In fact, the President's Working Group on Financial Markets is likely to suggest that the $1-per-share value long held sacred by money-market funds be abandoned. In other words, credit quality would matter again. If a fund bought risky paper in search of higher yields, the fund shareholders would bear any losses.

Does that make a difference to you in your search for a safe place to stash your "chicken money"? Maybe, and maybe not. The Treasury set a precedent with the original guarantee. Markets know the government would likely step in again to avoid a major breakdown in the short-term financing of America's business. Continued...