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WSJ writes "​Signs of Life Emerge in Commercial Paper", saying, "The floundering commercial-​paper market sparked back to life this week after some much-​needed resuscitation by the Federal Reserve." It quotes our Peter Crane, president and publisher of Crane Data LLC, "The reversal of flows out of general-​purpose money-​market funds is an almost equally significant event and the two should soon feed off each other." Also in CP coverage, Bloomberg.​com writes "​U.​S. Commercial Paper Soars Most on Record as Fed Becomes Buyer", citing this week'​s Federal Reserve "​Commercial Paper Outstanding" data, which showed the biggest jump ever in CP. The article says, "U.​S. commercial paper outstanding rose by $​100.​5 billion, or 6.​9 percent, to a seasonally adjusted $​1.​55 trillion for the week ended Oct. 29, the Fed said today in Washington. It was the first gain in seven weeks, reversing a 20 percent decline during the previous six weeks." Bloomberg quotes Peter Crane, president of Crane Data LLC, "Confidence is coming back. Knowing the Fed will buy the longer term means companies will be able to refinance and take back their short-​term paper if need be." See too, Bloomberg'​s "​Fed Buys $​145.​7 Billion of Commercial Paper to Start". For more on the Fed'​s Commercial Paper Funding Facility, click here.

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BankRate writes on CNBC.​com, "​Explainer: How the New Money Market Guarantees Work". It quotes Peter Crane on funds signing up for the Treasury guaranty program, "Fidelity and Vanguard had the luxury of waiting.... It'​s more that Fidelity and Vanguard didn'​t experience significant outflows. Most of them feel, '​why buy it anyway?' This is really a public relations move. Nobody expects to use the insurance. This is really just to put investors at ease. Certainly, had the run that was starting in money funds developed into a full-​blown run, everyone would have needed it. You stop the run and you don'​t need the insurance. You don'​t stop the run and you'​re dead anyway." It also quotes Crane, "There was this massive shift in the high end of the institutional market; but the retail market was barely impacted.... Overall, the money funds were fortunate to keep a lot of that cash in the house. Undoubtedly, some money went to banks, but if you look at the numbers, it seems most of the assets stayed in fund complexes and merely shifted from prime into Treasury or government."

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"​Money-​market funds flock to guarantee program" Associated Press via BusinessWeek.​com. The article says, "Treasury Department spokeswoman Jennifer Zuccarelli declined to specify how many firms applied for guarantees by Wednesday'​s deadline, but she said, '​We have seen significant interest.'" It continues, "Through Wednesday, the agency reported receiving $​337 million from funds paying upfront fees to participate. For the vast majority of eligible funds, the fee is one '​basis point,' or $​1 for each $​10,​000 in fund assets. Based on that fee level and the $​337 million in fees paid, applications have been filed to cover virtually all the $​3.​4 trillion in money fund assets. On new money it quotes, "But even those new, uncovered investments '​are much safer than they were before the guarantee program,' said Peter Crane, president of Crane Data, publisher of the money-​market fund newsletter, Money Fund Intelligence," says the AP. Other articles of interest: "​U.​S. Weighs Backing All Bank Deposits", "​Reserve Aims to Liquidate 14 of Its Funds", "​Q: Is My Money Fund Safe? A: Maybe", and "​Reserve says its money funds seeking guarantees".

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"​Money fund rescue smacks banks" writes the latest Financial Week, a weekly publication from Crain Communications. It says, "​Already, Bank of New York Mellon, Legg Mason and Northern Trust have reported that their efforts to firm up money-​market funds and cash strategies this year will weigh on their Q3 earnings." The piece adds, "​According to an estimate by money-​market research firm Crane Data, 21 financial institutions have pumped more than $​5 billion in capital into their money-​market funds during the last 13 months -- the most since 40 money-​market funds were bailed out almost 15 years ago." Finally, FW says, "​Five companies that have propped up their funds in the past few weeks -- Evergreen Investments, RiverSource Investments, Columbia Management, Russell Investments and Dreyfus -- each acknowledged that they had money-​market funds holding Lehman debt after the company filed for bankruptcy. Combined, the five firms had at least $​1.​5 billion in Lehman exposure among them, according to company filings. Not all of the companies disclosed how much they would infuse into their funds to compensate for the Lehman debt, but Mr. Crane estimates the figure at a combined $​1 billion."

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"​What'​s safe? Anything insured" says USA Today. It says, "Faith in money funds was severely shaken on Sept. 16 when the Reserve Primary fund fell below $​1 a share. The news sparked a run on money funds, mostly by institutional investors. In response, the Treasury Department announced a plan to temporarily guarantee money funds.... The guarantee is limited to assets in money funds as of Sept. 19, and will only remain in effect for three months. Participation by money funds is voluntary, and they must pay a fee. So far, eight [​now 9] of the 11 largest money fund managers have signed up, says Peter Crane of Crane Data." The article continues, "​And what about money invested after Sept. 19? While those funds won'​t be covered by the guarantee, the program has made money funds safer for new investors, too, Crane says. That'​s because the guarantee stopped investors from pulling their savings out of money funds, which was the biggest threat to their survival, Crane says. Finally, it says, "The Reserve fund blowup also caused money funds to '​get religion' and invest their assets more conservatively, Crane says."

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