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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: TH who wrote (98074)	9/30/2008 12:15:01 PM
From: yard_man	Read Replies (2) of 110194

>> Banks were in miser mode after the House's rejection of the rescue package. The key bank-to-bank lending rate, the London Interbank Offered Rate, or LIBOR, soared to 4.05 percent from 3.88 percent for 3-month dollar loans, and to 6.88 percent for overnight dollar loans _ the highest level since tracking began in 2001. That's especially worrisome because normally, LIBOR is just slightly above the Federal Reserve's target fed funds rates, an interbank lending rate. Now, it is more than 4 percentage points above the target rate of 2 percent. That has troubling implications for other lending rates tied to LIBOR, including homeowners' adjustable rate mortgages. Financial contracts tied to Libor amount to more than $300 trillion _ or $45,000 for every person in the world. <<

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