WSJ is reporting that the FED is Looking to Ease Strains in Commercial-Paper Market.

Our view is that this is loudable. The commercial paper market is a critical market to the economy. It is a bridge linking everyday the real economy and the financial markets (particularly during the current credit crisis).

We believe that commercial paper is where the FED should have started its work, not in bailing out wall street stock equity.

Excerpts from WSJ:

" U.S. officials are examining ways to ease deepening strains in the commercial paper market, which have been hit by an unwillingness among money market investors to hold risky assets.

The move could involve the Federal Reserve making an unusual foray into unsecured lending. The Fed has been flooding financial markets with loans in recent months, but those loans are secured by collateral.

In mid-September, the Fed unveiled a new lending program aimed at helping U.S. banks finance purchases of a kind of commercial paper called asset backed commercial paper, which is secured by collateral ...


The freeze started back in September (see image attached).


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