Commercial Paper Outstanding

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October 7, 2008
FRB: Press Release

The commercial paper market has been under considerable strain in recent weeks as money market mutual funds and other investors, themselves often facing liquidity pressures, have become increasingly reluctant to purchase commercial paper, especially at longer-dated maturities. As a result, the volume of outstanding commercial paper has shrunk, interest rates on longer-term commercial paper have increased significantly, and an increasingly high percentage of outstanding paper must now be refinanced each day. A large share of outstanding commercial paper is issued or sponsored by financial intermediaries, and their difficulties placing commercial paper have made it more difficult for those intermediaries to play their vital role in meeting the credit needs of businesses and households.

As seen in the following chart, problem "solved".


Click to enlarge.

For what it is worth, I continue to believe that this economy cannot tolerate high real interest rates any longer. It's just way too leveraged. As seen in the first chart, the epic exponential trend failure in commercial paper outstanding began in 2004. As seen in the second chart, interest rates on commercial paper started to rise in 2004. I doubt very much that was just a coincidence.

March 27, 2012
Wrong Way Siegel Strikes Again


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Hello? Interest rates way too high relative to trend? Could someone please explain how Ben Bernanke became Time Magazine's 2009 Man of the Year? Seriously, I'd really like to know.

Just opinions. This is not investment advice.

Source Data:
St. Louis Fed: Commercial Paper Outstanding
St. Louis Fed; 3-Month AA Nonfinancial Commercial Paper Rate