ABCP -what's with that?
Too much bacn?

Non-bank Backed Asset Backed Commercial Paper

What a mouthful - was funny watching news readers stumbling over the phrase. Apparently this is the "bad" kind of ABCP, the kind that's causing problems.

Last week the US Federal reserve board reduced it’s discount rate that it gives to the big banks – by 0.5 percent, to help slow the market slump. Opinions are that it helped. Another rate in the news is the federal funds rate – the overall lending rate between banks. It’s been the same since June of 2006, the next meeting to discuss it is September 18th. Speculation has been that they would drop that rate too, to help ease the current lending problems and boost the market. Due in part to that speculation, confidence has increased and the market improved - so maybe on the 18th the rate won't be changed - with another slight market drop correction.

The Globe and Mail had an interesting article this week (Aug 22) , by Barbara Ehrenreich- "Why America's poor rebelled - first they stopped paying their mortgaged, then they stopped shopping."  She talks about WalMart wondering where the customers have gone, she suggests their low wages to their own employees is at fault.

Easy credit became a substitute for a livable wage, hucksters push the latest toys at us all, we see it and we want it NOW. Consumers and investors will be looking for answers, for protection, for their money back Who's to blame - the rating agencies for the ABCP's , the institutes that packaged the consumer loans, the lenders, or the consumers. Stay tuned for class action suits.

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