Law | Economics | Policy
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
Please note: Comments are moderated. Only civilised conversation is permitted on this blog. Criticism is perfectly okay; uncivilised language is not. We delete any comment which is spam, has personal attacks against anyone, or uses foul language. We delete any comment which does not contribute to the intellectual discussion about the blog article in question.LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.