-->U.S. commercial paper: the only way is down
Commercial paper outstanding continued to drop like a stone,
according to new Fed data. In the week until 29 Aug total CP
outstanding dropped $69.8bn $, after $-77.7bn and $-81.7bn drops
in the preceding weeks. Asset-backed CP again was hit hardest.
ABCP outstanding declined $67.4bn, after $-70.9bn and $-50.0bn
in the weeks before. In three weeks time ABCP volume thus
slumped 16% to $985bn. The risk of fire-sale of assets because
of the shortfall of short-term refinancing certainly did not de-
crease. More and more"daughters" (a/k/a conduits) will probably
fall back to the credit lines from their"mothers" (just as it
is in real life). Of course, this was not supposed to happen
and kind of destroys this business model!