So here’s a pretty clear indication of the crisis in the money markets hitting Main Street.
“Main Street” in this instance being the the world’s largest Telecoms company. From Associated Press (emphasis ours):
GOLDSBORO, N.C. (AP) — The tightening of the global credit markets is crimping the world’s largest telecommunications company. AT&T Inc. Chairman and CEO Randall Stephenson said Tuesday that his company was unable to sell any commercial paper last week for terms longer thanovernight. Commercial paper, which helps lubricate the flow of business operations, is a short-term IOU available to corporations that banks usually know are good for the money. It’s not that short-term borrowing is unreasonably expensive, Stephenson said. A shortage of buyers for the debt means such borrowing is not as readily available as it had been even three weeks ago, he said. ”It’s loosened up a bit, but it’s day-to-day right now. I mean literally it’s day-to-day in terms of what our access to the capital markets looks like,” Stephenson said. AT&T spokesman Larry Solomon said later that as of Tuesday, the company has ready access to the commercial paper market at reasonable rates and various terms.
Not knowing what the next day brings in terms of corporate funding and liquidity is not a pleasant situation for any company to be in. Especially not so huge an organisation as AT&T.
While it might not be going under, companies which adopted more aggressive funding profiles during the great moderation, will be in a tighter spot.