Overnight Madness

Aside from the well-publicized widening and volatility in both the issuer-based and asset-backed commercial paper markets -- which until recently moved in tandem with the Fed Funds rate -- we're noticing an increased market interest in the short-term rating of the issuance. And this "tiering" is not limited to term-funding, but has infiltrated the overnight lending market. As always, a picture says a thousand words:

(Click on the graph to enlarge)