Despite all that you might have heard, the credit markets have been broken since August 2007.
Companies usually borrow in the commercial paper market to rebuild inventories in anticipation of rising sales, but sales have fallen even faster.
"That shows there is a long way to go," said Robert C. King an economist at the Jerome Levy Forecasting Center in Mount Kisco, New York. "Although eventually inventories will get down to some point where they will have to be rebuilt, we are not there yet."
"That could be some explanation for the commercial paper market (trends) because it is used to finance inventories," King said.
These guys can't even take the Holiday off. In one week, the Federal Reserve increased by 8.5% it's commercial paper (business loans).
The Federal Reserve expanded its purchases of commercial paper to $295.1 billion and its loans to securities firms increased as the central bank uses its balance sheet to combat the worst financial crisis in seven decades.
Cash borrowing by Wall Street bond dealers from the Fed totaled $55.9 billion on Nov. 26, up from $46.6 billion a week before.
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