Libor’s Creep Shows Credit Markets at Risk of Seizure (Update1)

[spotbird]

Source: Bloomberg

The London interbank offered rate, or Libor, that banks say they charge each other for three-month loans stayed at 1.33 percent today, near the highest level since Jan. 8 and up from this year’s low of 1.08 percent on Jan. 14, the British Bankers’ Association said. The Libor-OIS spread, a gauge of bank reluctance to lend, widened to the most since Jan. 9.

.....

Rising Libor shows banks remain skittish 19 months later because they still don’t know if they can trust each other, said Soren Elbech, treasurer of the Inter-American Development Bank, a Washington-based lender to Latin American and Caribbean countries. Libor is used to calculate rates on $360 trillion of financial products worldwide, according to the Bank for International Settlements in Basel, Switzerland.

Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=a0JxdKUPIyk4&refer=news

[Gman]

1. There isn't $360 trillion in the entire economy of the solar system or even the Milky Way

and I'm assuming that's a present value number. It's also entirely to humorous that they don't even trust each other because they were all leveraged to hell and back and now they just don't know who to trust because any one of them could go belly up at any time.

[spotbird]

2. Projection

They think their contemporaries are up to the same thing as themselves.

[CatholicEdHead]

4. Fair assessment, the same groupthink went around the world

so everyone thinks the same. :crazy:

[bemildred]

3. Well said.

The problem is that these juvenile half-wits run our economies, more or less.

[Supersedeas]

5. almost as if they know or want to foist something