Tuesday, August 21, 2007

Now It’s Commercial Paper Instead of Hedge Funds and Sub-Prime

Banks get new battering as commercial paper is caught up in crisis

Apparently loans are bundled up and flogged to companies and financial institutions in special financing vehicles called “conduits” that are then sold to investors, such as money market funds, insurance companies or other banks, by issuing commercial paper, or bonds, which pay a coupon. Though apparently the punters have gone off them and now prefer short-term safe havens such as US government debt. Well I never, you learn something new every day.

Posted by enuii @ 10:23 PM (695 views)
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6 thoughts on “Now It’s Commercial Paper Instead of Hedge Funds and Sub-Prime

  • This “crisis” isn’t even warmed up yet.

    The next line in the preprepared “defensive” plan will go into place shortly. I wonder what it will be. Something based on denial of reality possibly?

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  • planning4acrash says:

    Do you think that attacks on China’s exports of late could be an example of the next part of the defensive plan? Protectionism is likely if America suffers job losses and this would be contagious.

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  • The credit crisis inched closer to the heart of the British financial system yesterday as HBOS, the banking group, disclosed that it was bailing out a vast in-house fund that has been struggling to finance itself.

    Oh dear oh dear………. But we have only a small Sub Prime market here don’t we David Smith?

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  • It does appear we are moving towards protectionism but then if we can’t import cheap goodies from China inflation will start to pick up also there will be a lot of cheesed off chaves around once their supply of designer knock off clothing dries up.

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  • Someone is going to carry the can for all this – China looks favourite to me!

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  • It’s all hot air. The US would be insane to start a trade war with the Chinese. The Chinese hold in excess of $1trn in US government debt – and thus they hold the power to destroy the dollar overnight.

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