Fed Announces Plan to Buy Short-Term Debt

[struggle4progress]

Fed Announces Plan to Buy Short-Term Debt
By EDMUND L. ANDREWS and MICHAEL M. GRYNBAUM
Published: October 7, 2008

WASHINGTON — The Federal Reserve announced a radical new plan on Tuesday to jump-start the engine of the financial system. The Fed said in a statement that it would begin to buy large amounts of .... the unsecured short-term debt that companies rely on to finance their day-to-day activities ...

... the move will put more taxpayer dollars at risk ...

... the central bank would buy unsecured commercial paper ...


http://www.nytimes.com/2008/10/08/business/08fed.html?_r=1&ref=us&oref=slogin

Fed to Purchase U.S. Commercial Paper to Ease Crunch (Update3)
By Craig Torres

Oct. 7 (Bloomberg) -- The Federal Reserve will create a special fund to purchase U.S. commercial paper after the credit crunch threatened to cut off a key source of funding for corporations ... Fed officials .. didn't say how much commercial paper .. it plans to purchase ... The central bank's special purpose vehicle will be big enough to backstop the entire market, one official said on condition of anonymity. Issuers will be able to sell commercial paper to the Fed up to the average amount they had outstanding in August ...

http://www.bloomberg.com/apps/news?pid=20601068&sid=a_sTidQZdyOQ&refer=home

Main Street USA will now become the proud owner of hundreds of billions worth of "unsecured commercial paper"