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Libor Update Still Frozen

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by Felix Salmon
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Oct 01 2008 11:31am EDT

Libor Update: Still Frozen

Overnight Libor came down today, to Extremely High from Utterly Ridiculous. But three-month Libor went up: it's now 4.15%, which means that TED's at 334bp -- or as it's referred to these days, "frozen". (No interbank lending is actually going on at these, or any, levels.)

More worryingly, euro Libor is higher still, on both fronts -- and that's after Ireland's decision to guarantee just about any conceivable liability of all the country's major banks.

This is bad, people. And frankly I'm not sure that even passage of a $700 billion bailout bill will be enough to unfreeze markets at this point.

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