Monday, October 13, 2008

More on what happens when your CP becomes TP


Now I spy this, from Lew Rockwell (of all sources):

One possible answer is that there were a number of overextended industrial or retail companies that could not issue paper. The market for low-rated paper has always been very thin. A downgrade on commercial paper essentially puts the company out of the market. The Fed may have wanted to save some weak big-name companies, being fearful that a bankruptcy at this time of GM or GE or Ford would be a bad thing. - Rockwell

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