A bit offtopic :Commercial paper crisis?Let us look at some of the data provided by the Fed itself and ignore the chatter on TV and chatrooms http://www.federalreserve.gov/releases/h15/data/Business_day/H15_NFCP_M1.txt Non financial commerical paper -interest rates for 1month 10/01/2008, 2.00 10/02/2008, 2.01 10/03/2008, 1.98 10/06/2008, 1.80 10/07/2008, 1.50 Compare to that 1 year back: 10/01/2007, 4.79 10/02/2007, 4.69 10/03/2007, 4.71 10/04/2007, 4.70 10/05/2007, 4.70 Interest rates today are actually lower! For financial commercial paper 10/01/2008, 3.63 10/02/2008, 3.12 10/03/2008, 2.85 10/06/2008, 2.80 10/07/2008, 2.86 and 1 year back 10/01/2007, 4.77 10/02/2007, 4.79 10/03/2007, 4.78 10/04/2007, 4.80 10/05/2007, 4.89 Rates are still lower today.! Now see commercial paper outstanding: http://www.federalreserve.gov/releases/cp/outstandings.htm For the week that ended October 8, total commercial paper outstanding amounted to $1,459 billion down from the $1,607 billion reported for the previous week, but is a 2.9% percent drop a credit freeze? I think talking heads are bullshittng or the Fed's data is bogus. I think the former is the case today. BTW, the Sonic - GE scare, it is an urban legend.Sonic came out and denied they are facing issues raising money and they had no specific issues with GE either. This is like Orson Wells(spelling?)'s War of the Worlds -the masses believe anything they hear on TVfalling off a cliff?exactly,about the CP outstanding is only 12 or 13% lower than what it was in March 2008. is a 12-13% reduction a jump off the cliff?. its only a 5-6% fall from last years avg outstanding . diving off a cliff sounds like hype to me. interest rate comparison is not that appropriate.the point is that it is much lower than the supposed inflation of 3% -so people are ready to lend at less than inflation rate -not a sign of any crunch
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