Companies should not finance themselves with short term paper, they should finance themselves with profits, are go out of business. But then we would not need the fed right.
And how do the companies pay dividends, bonuses, one-time extraordinary payments, settlements? Gee, I really love your ignorance. But you surely sound like the market guru par excellence. For your info, the short-term fixed income markets are designed for companies to assure short-term liquidity. This is absolutely vital to their health (I am not talking about start-ups here, because tapping this market would be too expensive for them relative to other means of financing, its a rating issue). The market for those short-term securities is greatly damaged and confidence has to be restored thats why the Fed is cutting. There is NO OTHER REASON. But please believe what your TV idols are telling you on CNBC or elsewhere.
I am trader her in Japan. What else could BOJ do? They dont do a thing on their own. So why would they raise rates now against the Fed? That was a total clear case. I bet no more hikes this year for BOJ.
Well back before all these synthetic mumbo jumbo can't figure out the prices crap. they paid out dividends with profits you dim wit.
Are you really that stupid? Can you at least read otherwise its a huge waste of time to explain to you. Again: Companies have financed their short-term liquidity needs with commercial paper for decades. Investors do not buy commercial paper piece by piece they buy them packaged as securitized securities. Or do you want as investor to have to check the ratings, pricing sources and all this for each and every commercial paper? (There is lots of other reasons why this would be unfeasable but it would divert from the point). Now, those commerical papers are securitized but the problem right now is that there is no demand for those because of the most recent debacles in the credit markets and the lost faith in rating agencies. DOES THIS MAKE ANY SENSE AT ALL? I mean, if you dont know anything about this then why dont you simply admit but you come along and open your big wide mouth as if you are the top trader of a prop desk.
That was the problem; banks didn't want to go under with their stupidities on lending; so they uses this excuse to drag any good business with them in the name of protecting the economy. Today's banking system is pure monopoly; no wondering they hates the ideas about WalMart to operate its own banking. Liquidities are tight; because no-one wants bank's worthless commercial paper; Banks lie about these paper.