The economic meltdown has turned into a terrific opportunity to learn vague financial terminology. I'll begin a series of posts on such terms.
Today's term: commercial paper, and a related concept: the commercial paper market.
From Investorwords.com: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. Maturities typically range from 2 to 270 days. Commercial paper is available in a wide range of denominations, can be either discounted or interest-bearing, and usually have a limited or nonexistent secondary market. Commercial paper is usually issued by companies with high credit ratings, meaning that the investment is almost always relatively low risk.
Commercial paper is apparantly drying up, making it difficult for businesses to stay afloat. The Federal Reserve is stepping in to ensure the market stays solvent.
