Beat That Dead Horse

Without the proper means to gauge which investments are safe and the bottom falling out of previous investments, there has been a rapid decline in the market for commercial paper.
The combined value of two major sources of credit - outstanding commercial and industrial bank loans, and short-term loans known as commercial paper - peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent.
Not once in the years since the Fed began tracking such numbers in 1973 have these arteries of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975.
These are investors unwilling to take the risk involved in backing corporate loans. This could rapidly cause a major recession or depression. This is why it’s so important to have a working system for assessing the worth of investments. When that system breaks, everything else comes down like a house of cards.

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