Reply #36: Aw, crap! That's exactly what I've been worried about...

[antigop]

From the article posted:

State Street also spent almost $3 billion to prop up stable value funds that were hurt by the global decline in credit markets.

Here is some more info on stable value funds:
http://www.smartmoney.com/investing/mutual-funds/a-hidden-worry-in-some-401k-plans/?cid=1108

For most investors, the market crash shattered the notion of “safe” investments. Bond funds lost money, the government stepped in to bail out money funds, banks failed.

Now millions of workers who invest through their 401(k) plans are finding that one of the last pillars of safety – so-called stable value funds – may be riskier than they assumed.

These funds, which are typically only available through retirement plans, are essentially bond portfolios wrapped in insurance contracts that promise to smooth returns over time. As the value of the underlying portfolio rises and falls, the insurance company makes up (or holds onto) the difference. Historically, they’ve been considered tremendously safe: Two out of three retirement plans offer a stable value fund as the most conservative option.

But as we pointed out in our earlier story, “Think Your Money’s Safe?”, stable value funds are only as good as the guarantees behind them. And now that a fund in the Lehman Brothers retirement plan has suffered an unprecedented drop, investors and their employers are forced to wonder just how stable their fund really is.