What to watch for in the credit crunch

1. Money market desk – are banks starting to lend?   Capital has to be increased in companies and banks so that banks will lend to companies and banks will lend to banks and companies can survive on the cash at hand or get credit from banks. 

2. LIBOR – is a daily reference rate based on the interest rates at which banks offer to lendunsecured funds to other banks in the London wholesale money market (or interbank market).

3. TED Spread –  the TED spread was the difference between the interest rates for three-month U.S. Treasuries contracts and the three-month Eurodollars contract as represented by the London Interbank Offered Rate (LIBOR).

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