Originally posted by: chess9
Originally posted by: halik
Originally posted by: ironwing
Yesterday NPR had a story pointing out that while the LIBOR was falling, the banks still weren't lending to each other. Price isn't the issue.
The way i understand it, Libor is the rate for OTC transaction, so if you're a bank in BBA, you can call up other banks and borrow at that rate. Whether banks do or don't isn't really relevant, so long the system works.
Was that the story where they had a whiteboard with a bunch of bank names on it that are looking for money and like 2 banks that were actually offering money? I heard that last weekend, it was from early Oct.
Uh, how do you know the system is working if banks aren't borrowing from each other?
Furthermore, with the market in the tank, and consumers getting ready to take another hit in rising gas prices after OPEC's announcement, and the loss of jobs, and the continued fall in housing production and sales, and the psychology of the market downright BLACK how much difference does LIBOR really make? Not much, in my estimation.
Until we start seeing signs of an expansion OUT of this recession, LIBOR has only tangential meaning, IMHO.
-Robert