• 6 minutes WTI @ 67.50, charts show $62.50 next
  • 14 minutes Saudi Fund Wants to Take Tesla Private?
  • 18 minutes California Solar Mandate Based on False Facts
  • 49 mins Starvation, horror in Venezuela
  • 2 hours Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 8 hours Monsanto hit by $289 Million for cancerous weedkiller
  • 4 mins Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 2 hours Why hydrogen economics is does not work
  • 6 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 7 hours Correlation does not equal causation, but they do tend to tango on occasion
  • 15 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 6 hours Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
  • 17 hours Merkel, Putin to discuss Syria, Ukraine, Nord Stream 2
  • 14 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 19 hours Saudi Production Cut or Demand Drop?
  • 13 hours Saudi Aramco IPO Seems Unlikely
Alt Text

Yieldcos Are Back And Better Than Ever

Yieldcos have had a rocky…

Alt Text

Clean Energy Stocks Outperform Oil And Gas

Green energy stocks saw tremendous…

Alt Text

Why Wall Street Is Bullish On Refiners

Wells Fargo has noted that…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

The Creeping Terror

Over the last few days I’ve noticed one significant thing. Creeping yields on U.S. commercial paper.

Prior to the financial crisis in 2008, rising yields on commercial paper were one of the first signs of trouble in the credit markets. Holders sold off paper to reduce their exposure to troubled businesses. As prices for commercial paper dropped, yields spiked.

Over the last year, yields have declined as buyers returned to the market. Everything seemed to be good again.

But there has been a notable rise in yields on longer-dated paper over the last month.
Yields on 90 Day AA Financial paper were holding steady around 0.2% for most of the last six months. Since early March, they've been creeping up to now stand near 0.3%.

US Commercial Paper - 90 day

90 Day AA Asset Backed paper also shows a notable increase in yield over the last month. Same with 60 Day Financial and Non-Financial. Even some 30 Day paper looks to have broken upward from trend.

US Commercial Paper - 60 Day

US Commercial Paper - 30 day

Initially, I thought the rise in yields might be due to FAS 166, the new rules that came into effect recently requiring U.S. banks to bring risky loans held in off-balance-sheet vehicles back onto their books. Giving investors a reason to sell out of paper issued by financial companies.

But the fact that yields on non-financial paper are also rising suggests this is something more systemic. Risk aversion is rising in all sectors.

This deserves some digging. I'm back home tonight and will be looking into it next week. More soon. In the meantime, have a great weekend.

By. Dave Forest of Notela Resources




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News