This should come as no suprise. Bloomberg is reporting today that Asset-Backed Commercial Paper Falls for Fourth Week . What does this mean to the rest of us?
Well... we've made it through one of this storm's many eyes, and the headwinds are picking up again. Simply put in the article:
"The market for short-term debt backed by assets including car loans, credit card receivables and mortgages shrank for a fourth consecutive week amid signs that credit quality is weakening."
Every wave of the credit crisis thus far has begun in a similar way. Asset backed short term paper demand dries up, funding for the long end wanes, and we have another failure.
Weren't we all done with this? Wasn't the Fed's Bailout of Bear Stearns and opening of a special discount window to the broker/dealers supposed to increase the liquidity in the markets?
From a separate Bloomberg Article:
"``The Fed is trying to drive a car with only slight control of the steering wheel and no control of the gas or the brakes,'' Clive Granger, the 2003 Nobel laureate in economics and professor emeritus at University of California, San Diego, said in an interview."
The coming days will see another wave of the credit crisis hit our shores. Look for a big failure or write-down in the wake of this part of the storm. Each wave gets bigger and bigger.
All-in-all it looks like the storm is once again picking up speed.
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