ABCP Shrivels Up, Banks Leverage Up

By: Financial Ninja Thursday, June 26, 2008 9:45 AM

Article Author

Bio and Articles
Author's Website

Vote for next session

The next market session will close:

Asset Backed Commercial Paper (ABCP) outstanding continues to shrivel up…

Credit markets are still frozen despite the introduction of various credit and liquidity facilities (TAF, TSLF and PDCF).

Asset Backed Commercial Paper Explained

To be looking for a ‘bottom’ in banks specifically and financials in general is a mistake as long as ABCP outstanding continues to decrease. The ABCP isn’t just disappearing. As it comes due and as it can’t be rolled over, it is being placed onto bank balance sheets. So instead of de-leveraging, banks are actually forced to expand their balance sheets as the economy dives into the first consumer lead recession in decades…

Bookmark:
Email
Print

The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.

Related Stories