how does bailout solve the problem of soaring LIBOR?

Discussion in 'Wall St. News' started by Susannah, Oct 1, 2008.

  1. Just wondering, how does the bailout solve the problem of the soaring LIBOR, especially if it suspends mark to market accounting? Wouldn't that serve to make banks even more suspicious of each other?

    Or, is the LIBOR more an issue of banks just don't have money to lend right now because they have to keep it in order to meet their own collateral requirements?

    Question came to me while reading this article:
  2. Think of past historical events when the TED spread soared like this, and how they ended.
  3. JCVR


    Well IF all the banks take advantage of this plan and sell their risky assets then the people trading with them and lending to them will know that at least there are no other surprises hiding on the balance sheet.

    But in the end it will come down to trust still I guess.
  4. Thermactor, I know, the street took care of it. Let you know which ones you could trust by share price. (in a very quick way :eek: )

    Guess I was just hoping that maybe they really have come up with something to fix things. I'm not looking forward to things getting bad.
  5. Great question. One of the best.

    I don't even believe all the fear mongering anecdotal stories about people and businesses not getting loans or credit BECAUSE OF the issues presented in THIS LEGISLATION.

    AFAIK, banks simply tightened lending standards, which seems reasonable in the wake of acting so irresponsibly and blowing so much money on bad loans the last 7 years.
  6. This is the biggest lie being told. If the mortgages are bad, why they do not allow me to back it back (at even twice the current price in the market?).

    Joe is scammed on the way up, on the way down, and now at the bottom.

    I wrote about this on RFT's blog. I am sick reading this lie being repeated.
  7. aresky