Comments on: More Improvement in Money Market Conditions http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market.html Sun, 22 Nov 2009 22:11:10 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: FairEconomist http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market.html#comment-23511 FairEconomist Tue, 28 Oct 2008 16:22:00 +0000 http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market-conditions/#comment-23511 <i>The European Central Bank today lent financial institutions 325.1 billion euros</i><br/><br/><i> financial institutions lodged 213.1 billion euros in the ECB's overnight deposit facility yesterday</i><br/><br/>That sure sounds like it's helping. /snark<br/><br/>67 billion in 3-month commercial paper went through yesterday, which I assume was the Fed CP facility going through. Effect on credit indicators? A2/P2 scarcely changed at 4.35<br/><br/>IMO the fact that interbank lending is improving - somewhat - but but usable credit is essentially unaffected is grim. I've stated my opinion many times - the spreads are default predictions. Massive bailouts have reduced (but tellingly not eliminated) bank default probabilities but bailing the banks is doing nothing for the real economy. The European Central Bank today lent financial institutions 325.1 billion euros

financial institutions lodged 213.1 billion euros in the ECB’s overnight deposit facility yesterday

That sure sounds like it’s helping. /snark

67 billion in 3-month commercial paper went through yesterday, which I assume was the Fed CP facility going through. Effect on credit indicators? A2/P2 scarcely changed at 4.35

IMO the fact that interbank lending is improving – somewhat – but but usable credit is essentially unaffected is grim. I’ve stated my opinion many times – the spreads are default predictions. Massive bailouts have reduced (but tellingly not eliminated) bank default probabilities but bailing the banks is doing nothing for the real economy.

]]> By: Mike Sankowski http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market.html#comment-23501 Mike Sankowski Tue, 28 Oct 2008 15:12:00 +0000 http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market-conditions/#comment-23501 Note that the rates are coming down on increasingly longer tenors. First it was overnight, now the 1 week and 1 month are normalizing. the three month is still quite bad, but it is getting better. Note that the rates are coming down on increasingly longer tenors. First it was overnight, now the 1 week and 1 month are normalizing. the three month is still quite bad, but it is getting better.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market.html#comment-23490 Anonymous Tue, 28 Oct 2008 13:40:00 +0000 http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market-conditions/#comment-23490 Just when you thought it was all calming down and those interbank rates were still coming down (we should note they rose on friday), another cog flies of the wheel.<br/>The recent Treasury TIPS auction was pretty dismal.<br/> Still with rumours that pension funds need to increase their portfolios of equities (dumping bonds)to meet end of month targets, on the face of it things should continue to improve. Just when you thought it was all calming down and those interbank rates were still coming down (we should note they rose on friday), another cog flies of the wheel.
The recent Treasury TIPS auction was pretty dismal.
Still with rumours that pension funds need to increase their portfolios of equities (dumping bonds)to meet end of month targets, on the face of it things should continue to improve.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market.html#comment-23486 Anonymous Tue, 28 Oct 2008 13:05:00 +0000 http://www.nakedcapitalism.com/2008/10/more-improvement-in-money-market-conditions/#comment-23486 This is good news! Our great overloads, I mean bankers, really deserve a new pay raise for their selfless efforts to resolve this crisis. This is good news! Our great overloads, I mean bankers, really deserve a new pay raise for their selfless efforts to resolve this crisis.

]]>