Scenes From the Credit Crunch, UK Edition

It's really bad out there right now. If you took a snapshot of financial conditions, especially in London, you'd have to conclude it's now much worse than during the worst days of the summer – the only thing missing is the sense of panic. But how's this for a datapoint:

The sterling interbank market has collapsed at the fastest rate in modern history.
Office for National Statistics data sourced to the Bank of England shows the volume of market loans in the banking system plunged from £640bn at the onset of the credit crunch in August to £249bn by the end of September.

The LSE's Tim Congdon is quoted thusly:

“A market that has taken 30 years to build has completely imploded in a matter of months. Lenders have been squeezed savagely. We’ve moved into a different era,” he said.

You know there's more. Banks, foremost among them Citigroup, are asking their corporate clients not to draw on lending facilities to which they are entitled. Here's the quote:

A Citigroup spokesman said: "Citigroup honors its commitments to its clients but, as part of our normal business, we discuss with clients the potential use of our balance sheet. This is standard industry practice."

Giving clients credit lines and then asking them not to use them is now standard industry practice? And it's been standard for how long? As Yves Smith says,

There appears to be an element of window dressing, of banks trying to avoid having audited year end balance sheets that spook regulators and investors. Not a pretty picture at all.

Oh, and did I mention? Sterling Libor is now at a nine-year high, and the ABCP market, says Sam Jones, "has been all but wiped out".

And all this is happening before the inevitable collapse in UK property prices, where the bubble was literally twice the magnitude of that in the US.

Someone, give me some good news, please!