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$673 Billion In Commercial Paper Maturing Through July 16 As CP Rates Creep Higher

Tyler Durden's picture




 

As an increasing number of analysts evaluate the impact of Europe's rolling defaults and failed auctions on Europe's liquidity and particularly its shadow liquidity system, best seen in rising European Commercial Paper rates, is it about time to take a look at our own back yard. According to the Federal Reserve there is $673 billion in Commercial Paper maturing in the next 6 weeks alone, of which the bulk, Non-ABL Tier 1 CP amounts to $328 billion, ABL CP totals $292 billion, and Non-ABL Tier 2 CP totals $34 billion. What is concerning is that just like in Europe, rates here in the US for the various tranches of Commercial Paper have started rising. And as this is arguably one of the biggest components of the US shadow liquidity system, it bears close watching, especially if spreads continue leaking wider as they have recently. One thing to keep in mind: the Fed' CPFF emergency facility has now been retired, and any hitch in the CP market will necessitate another brand new involvement in broad liquidity provisioning by the Fed. Then again, just as in the Central Bank liquidity swap case, which was reactivated on a moment's notice, we don't see any problem with the Fed announcing the CPFF program going live with no notice.

The chart below shows a maturity distribution of various CP tranches over the next six weeks.

And the recent rates on the three key CP tranches can be seen in the chart below. All three are trading at their 2010 wide levels.

 

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Mon, 06/07/2010 - 14:17 | 400099 jbc77
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There are just so many landmines throughout the global financial landscape that any one of a number of black swans will bring the fun & games to a complete halt. Pick your poison. So many ways to die...choose one.

Mon, 06/07/2010 - 14:21 | 400108 Ethics Gradient
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That said, the money's not going to go into shares, euros, european government bonds, yen, AUD, banks, oil, chocolate buttons....hang on, Cocoa's going up. They could have a problem.

Mon, 06/07/2010 - 14:26 | 400118 Cyan Lite
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Market already has it priced in...

Mon, 06/07/2010 - 14:29 | 400128 anynonmous
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Arms Advisory - June 7 letter (via what's his name)

 

http://www.scribd.com/doc/32661148/June-7-2010

Mon, 06/07/2010 - 14:41 | 400153 Mikebrah
Mikebrah's picture

Low volume down day?  Something's not right...

Mon, 06/07/2010 - 14:42 | 400156 Mitchman
Mitchman's picture

Everybody's waiting for the Fed.

Mon, 06/07/2010 - 14:42 | 400154 Mitchman
Mitchman's picture

What constitues the second tier where the blowout is occurring?

Mon, 06/07/2010 - 14:57 | 400187 Cognitive Dissonance
Cognitive Dissonance's picture

My fear is that whatever or wherever it is or was will be obscured long enough for some to save themselves at the expense of people who just want fair access to information.

Of course that's the name of the game right? Information?

Mon, 06/07/2010 - 14:44 | 400155 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This is going to be quite a week.  First Congressional hearing on the Hollywood Futures tomorrow, then on the 9th the Fed is doing something with their debt that I still do not understand (they are alleviating debt to whom/where exactly?).  :\

This is a shitshow, an utter shitshow.  The 1st world is running the biggest shitshow ever imagined.  The shithawks are circling, and the Fed is climbing a shitrope!  I am beginning to think that Lahey is based on BS.

Trailer Park Boys : The best of mr.laheys shit analogy

http://www.youtube.com/watch?v=AFuKkM-tqN0&feature=related

Mon, 06/07/2010 - 14:47 | 400163 Ragnarok
Ragnarok's picture

What about Rickyisms?

 

I don't wanna be the one to say I todaso, but I fucking todaso!

Mon, 06/07/2010 - 14:52 | 400172 WineSorbet
WineSorbet's picture

+10000

Hands down the best show ever made americans are too stupid to watch!

Mon, 06/07/2010 - 16:40 | 400370 PhattyBuoy
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... you feel that - the way the shit clings to the air - it's already started  - the SHIT BLIZZARD !!!

Tue, 06/08/2010 - 01:27 | 401044 Double down
Double down's picture

Ahh, Nova Scotia.  Behind that trailer park there is actually a real nice little trail.  No, no, it is not the "shit trail"

Mon, 06/07/2010 - 15:08 | 400214 John McCloy
John McCloy's picture

OT: Helen Thomas was fired/resigned. They are trying to paint it as her comments regarding Israel however he is what I believe the actual reason they pushed her out the door is when less than a month ago she put Gibbs on the spot about Glass-Steagall and asked why the President is opposing the call for it's return:

 

http://www.larouchepub.com/pr/2010/100517eir_gibbs_gl-st.html

Mon, 06/07/2010 - 15:20 | 400245 trav7777
trav7777's picture

She's been highly agitational on a variety of topics.

But, this is a 3rd rail you can't touch...the zion runs deep in this administration.  They appear to have hire/fire power over a lot of positions and people.

Mon, 06/07/2010 - 15:23 | 400253 Ragnarok
Ragnarok's picture

Simply politics, the Democrats can't afford to lose the NE Jewish vote (or money) to the Republicans.

Mon, 06/07/2010 - 15:38 | 400281 TBT or not TBT
TBT or not TBT's picture

It's all a little simpler than that.   One guy with a Flip camera got her to dribble out exceptionally biased(she's supposed to be a "journalist") and genocide-ugly bile in as-a-matter-of-fact, coldly dispassionate way that leaves little doubt as to her professional integrity.   And she's 89.

Mon, 06/07/2010 - 18:27 | 400594 cbaba
cbaba's picture

sometimes people say ugly things when they got angry, that they don't want to say/mean it. She said sorry for her words but they didn't get her apology. yes she is 89 and we have to accept her apology.

 

 

Mon, 06/07/2010 - 15:58 | 400289 jkruffin
jkruffin's picture

Euro will be 1 for 1 in less than a month, and very well could fall under parity very quickly.

Mon, 06/07/2010 - 16:01 | 400295 cbaba
cbaba's picture

that may be the reason in todays gold jump?

Mon, 06/07/2010 - 16:41 | 400373 Ripped Chunk
Ripped Chunk's picture

"Here come those tears again"

Mon, 06/07/2010 - 20:26 | 400717 puckles
puckles's picture

The second tier is the equivalent of the least creditworthy private businesses using commercial paper, which means a blowout is about to happen in that sector.  Note that these are already rather large businesses, who use commercial paper to paper over their end of the month payrolls, taxes, etc.  My guess is that revenues have slowed down immensely, well beyond normal terms.  These are not likely to be retailers, but rather their suppliers, or any other middle-market purveyor, not just distributors.  (This is in reply to Mitchman).

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