The Commercial Paper report is just out, the decline of outstanding paper is another $13 bln for the last week, but it’s better comparing with pre-cut decline of $48 bln. The total decline from end of July is 15% comparing with 22% decline during the 2000-2002 period. The speed of decline is astonishing.

The price to fix the credit markets is high:

  • Dollar is at all-time low right now. Not just 20-year low, 40-year low. It’s the lowest level on record
  • Oil is all-time high
  • Gold is 25-year high

I don’t think Bernanke has a room to cut in October, unless credit markets will be materially worse