U.S. commercial paper shrank for the week by $20 billion
Editor’s Note: This is an important statistic to watch, if the U.S. economy is really seeing recovery, we should see steady increases in the commercial paper market. That would show that businesses are needing more short-term funding for operation like increasing production and payroll and that would show up in increases of issuance of commercial paper. It is important to watch the “plumbing” of our financial markets to see if the media and analysts are in-line with what is actually happening in the capital markets which drive growth.
Reuters - The U.S. commercial paper market contracted for the first week since early February, suggesting a lingering impact from the global credit crisis, Federal Reserve data showed on Thursday.
For the week ended March 3, the size of the U.S. commercial paper market, a vital source of short-term funding for companies’ day-to-day operations, fell by $20.4 billion to $1.134 trillion outstanding, from $1.154 trillion outstanding the previous week.
Piper Jaffray starts $300 million dollar commercial paper program
Piper Jaffray Companies plans to start a $300 million commercial paper program, the investment bank said in a regulatory filing on Wednesday.The program will in part fund Piper Jaffray’s securities portfolio and provide general working capital, the filing said.
Piper Jaffray, which caters to small and mid-size business customers, is recovering from five consecutive quarters of quarterly losses, beginning in the first quarter 2008 through first quarter 2009.
Commercial paper rises $35.8 billion to hint U.S. economy is growing
Editor’s Note: This is a good sign for now. In the article they mention that inventory levels have been drawn down and this may be the signal that companies are restocking and that is part of the incease in commercial paper activity. We will have to continue to watch this development almong others to see if this is a lasting change or just a blip.
News (Reuters):
The U.S. commercial paper market expanded in the latest week, suggesting the economy may be growing again after the longest recession in decades as the two-year-old global credit crisis slowly eases, analysts said.
Federal Reserve: Commercial Paper Outstanding Rises By $10.7 Billion This Week
Dow Jones, New York - The U.S. commercial paper market increased this week, reversing course after several weeks of declines, according to data released by the Federal Reserve Board on Thursday. This week, the outstanding level went up by $10.7 billion, after a decline of $27.6 billion last week.
The asset-backed portion of this short-term market did fall, though, by $3 billion. Last week, this part of the market grew by $900 million on a seasonally adjusted basis, after shrinking by $4.6 billion in the prior week.
U.S. commercial paper outstanding resumes decline
The U.S. commercial paper outstanding fell in the latest week, resuming its recent decline, suggesting persistent tension in short-term credit markets, Federal Reserve data released on Thursday showed.
The U.S. government hopes to break this stubborn credit logjam as it kicked off its Term Asset-Backed Securities Loan Facility (TALF) in a bid to stimulate lending to cash-strapped consumers and small business.
This latest rescue program comes a day after the Fed pledged to buy another $1.15 trillion in debt securities, including $300 billion in Treasuries, with the goal of lowering private-sector interest rates and improving overall credit conditions.
Total commercial paper outstanding fell $7.5 billion to $1.477 trillion in the week ended March 18. It is far below its peak of $2.2 trillion prior to the onset of the credit crunch that led to the global economic downturn.
Commercial paper is a crucial source of short-term funds for many companies, who spend the proceeds on payrolls and inventories.
The week’s shrinkage in the CP market was led by a $17.3 billion decline in asset-backed commercial paper outstanding, which ended at $699.8 billion on Wednesday.
However, the closely-watched unsecured financial CP sector, which reflects the state of the battered banking industry, grew for a second week in a row. This type of commercial paper outstanding increased by $10.8 billion to $587.3 billion.
Source: Reuters
U.S. commercial paper market recovers a bit compared to last week
The size of the U.S. commercial paper market rebounded slightly in the latest week after last week’s huge drop, suggesting some stability in this critical part of the credit market.
These short-term IOU’s – which many companies rely on to fund their daily operations — rose $3.9 billion to $1.484 trillion in the week ended Wednesday, according to Federal Reserve data released on Thursday. It fell $44.2 billion in the prior week.