> On Oct 1, 2008, at 4:38 PM, Jim Devine quoted Dean Baker:
>
>> Washington DC's Fox affiliate appears to have been taken over by Wall
>> Street lobbyists. It has been reporting all sorts of unsubstantiated
>> assertions that a credit squeeze is destroying the economy. You'd
>> never know that typical 30-year mortgage is going for around 6.0
>> percent these days. Back when I last bought a home I had to pay 7.15
>> percent. But in Fox's sell the bailout campaign, there is no place
>> for
>> arithmetic.
>
> The point isn't the price of credit right now, it's its
> availability. It is very hard to get a mortgage these days. The
> supply of mortgage credit outstanding from banks in September was
> down over 3% from a year earlier. In Dean's attempt to resist a
> bailout, is there a place for nonanecdotal data?
>
>> That sounds really bad -- the highest overnight borrowing cost in
>> history. Maybe it would have been helpful to tell readers that this
>> data has only been compiled since 2001, a period of unusually low
>> interest rates.
>
> Interbank lending rates have been very high, but again, it's not so
> much about price but availability. The interbank market has
> essentially frozen. If you're going to debunk the MSM, you should
> hold yourself to higher standards.
>
> Doug
> From: Doug Henwood <dhenwood at panix.com>
> Date: October 1, 2008 5:24:00 PM EDT
> To: Progressive Economists Network <pen-l at lists.csuchico.edu>
> Subject: interbank lending
>
> I asked a friend who's got access to a Bloomberg what's up with
> interbank lending. Here's his answer:
>
>> USD are very high, and irrelevant, because market is frozen and no
>> one is lending at these rates or any rates
>>
>> 3m libor, 4.15 up from 2.82 on Lehman Day
>> even 1week, 4.16 up from 2.49 on Lehman day
>>
>> spread between expected path of Fed funds and 3m libor, 250, up
>> from 104 on lehman day.
>>
>> Apparently, people are just pulling numbers out of their asses when
>> BBA calls.
>>
>> Non USD rates also up, but not nearly as much. It's a USD issue.
>
> Dean really needs to re-check his facts.
>
> Doug