commercial paper

August 10; Emergency Calls, Reigning Confusion, and ‘Not My Job’

By |2017-08-10T17:08:34+00:00August 10th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In July 2012, the LIBOR manipulation scandal broke wide and before Congress then-Federal Reserve Chairman Ben Bernanke used it to cleverly cover up for his crisis actions (more so inactions). He told the Senate Banking Committee that the LIBOR system was “structurally flawed” before intimating it had been that way for some time. Asked if [...]

Subprime Is Contained (and other notable statements declaring They Really Don’t Know What They Are Doing)

By |2017-08-09T18:44:37+00:00August 9th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Ben Bernanke, then Chairman of the Federal Reserve, told Congress in March 2007 that subprime was contained. He will rightfully be remembered in infamy for that, but that wasn’t the most egregious example of being wrong. Even putting it in those terms risks understating the problem and why it stubbornly lingers. Being really wrong is [...]

You’ve Heard of Bear’s Funds, Why Not BNP’s?

By |2017-08-09T14:40:52+00:00August 9th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When Bear Stearns nearly failed, made to merge, in March 2008 it wasn’t really a surprise. Yes, markets were shocked by the demise of the ancient firm, one of the bulge bracket cartel which suggested surprise over the severity of it more than that things were going bad. For more than a year, starting in [...]

Memories of 2a7 Fade, But Commercial Paper Remains Relevant Anyway

By |2017-01-20T18:22:17+00:00January 20th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If you are an enterprising financial firm with spare cash toward the end of the business day, you have several options for it. Primary among them is the Fed’s Reverse Repo (RRP) desk which will pay you 50 bps interest with your cash secured by both the reputation of the Federal Reserve as well as [...]

RHINO

By |2016-12-29T09:45:24+00:00December 29th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This is a repost; originally published Dec. 22, 2016. The federal funds rate target is essentially nothing more than a communication tool. You don’t have to take my word for it, the same conclusion has been reached at the level of the FOMC itself. There was, in fact, some debate, though limited in scope, in [...]

Searching For 2a7 Comfort In CP And Finding Instead More Confirmation Of The Same ‘Something’

By |2016-09-28T17:10:07+00:00September 28th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With 2a7 money market reform only a few weeks from its full implementation, there should be by now visible shifts in all the places where such reform will directly impact. Prominent among these money spaces is commercial paper, where the ranks of prime MMF’s that once lent in this market have been reduced in the [...]

Unresolved: Nine Years Later Still No ‘Dollars’

By |2016-08-09T19:18:17+00:00August 9th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The fact that we are still discussing illiquidity in “dollar” markets everywhere shows just how little has changed despite so much time and effort. It is August 9 again, the ninth anniversary of the day that changed everything. Even though it has been almost a decade, it’s as if “we” learned nothing from the experience. [...]

Friday FOMC Memories: Fair Is Fair

By |2014-03-14T16:51:32+00:00March 14th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

It is somewhat of a fair criticism that playing armchair quarterback years after events unfolded amounts to lazy or devalued analysis. Picking apart assessments with the full benefit of hindsight is seemingly unfair to the participants and targets of any reproach. It also may appear to be irrelevant to spend so much time when current [...]

The Federal Reserve – Lender of First Resort

By |2008-10-30T18:02:33+00:00October 30th, 2008|Economy|

The Fed's balance sheet continues to expand: Oct. 30 (Bloomberg) -- The Federal Reserve bought commercial paper valued at $145.7 billion in the first days of the program aimed at backstopping the market, indicating the central bank is generating most of this week's record gains in short-term corporate borrowing. The central bank extended $144.8 billion [...]

Commercial Paper Market Recovering

By |2008-10-14T20:29:59+00:00October 14th, 2008|Economy|

The commercial paper market appears to be improving slightly (via WSJ): NEW YORK -- After being severely constricted for weeks, the commercial paper market showed tentative signs of recovery on Tuesday after global leaders aimed a number of initiatives at stabilizing financial markets. On Tuesday, the U.S. government said it would inject $250 billion into [...]