Free Republic

Over the last few days I’ve noticed one significant thing. Creeping yields on U.S. commercial paper. Prior to the financial crisis in 2008, rising yields on commercial paper were one of the first signs of trouble in the credit markets. Holders sold off paper to reduce their exposure to troubled businesses. As prices for commercial paper dropped, yields spiked. Over the last year, yields have declined as buyers returned to the market. Everything seemed to be good again. But there has been a notable rise in yields on longer-dated paper over the last month. Yields on 90 Day AA Financial...

WASHINGTON — The Federal Reserve announced a radical new plan on Tuesday to jump-start the engine of the financial system. The Fed said in a statement that it would begin to buy large amounts of short-term debt in an effort to stimulate the credit markets, which have all but dried up. Under the program, the Fed said that it would buy the unsecured short-term debt that companies rely on to finance their day-to-day activities. “This facility should encourage investors to once again engage in term lending in the commercial paper market,” the Fed said Tuesday in a statement. “An improved...