uh

[solarbird]

303 basis points peak

The TED, a measure of interbank super-short-term lending rates, just bounced off 303 basis points (slightly higher than this chart shows; the chart is lagging), which is a fancy way of saying 3.03% interest, compared to a normal of 25 basis points, or 0.25%. This tracks money banks loan to each other for extremely short periods of time, money necessary to do business; money necessary to do things like transfer direct-deposit paycheques. This means that banks are telling each other they consider it reasonably enough likely that any given counter-party will not survive the night that they need to charge not their normal small-profit courtesy rate (0.25%) but 12 times that.

The last time the TED hit close to this figure was during the 1987 stock market crash, which was a 20% haircut for the major indices, when it hit 306 basis points. It's now dropped back down a little (297 bp).

I am hearing spooky rumours. I'm not going to repeat them because they are unvalidated. But I am hearing spooky rumours.

Comments

[mamishka.livejournal.com]

Should I start saving all my money in my mattress?

[solarbird]

I do not generally recommend First Bank of Sealy. However, I am not a financial advisor and this is not investment advice.

[meesto.livejournal.com]

I believe that the wheels are officially coming off today. +$100 move in gold says that some crazy stuff is going on.

[solarbird]

...the move I see is +$70, after months of decline. I mean, don't get me wrong, it's a big move, but...

[meesto.livejournal.com]

I look at the 3-day composite spot price from Kitco that shows the 24-hour trading range. If you follow that the move was greater than the NY trading day.

http://www.kitco.com/images/live/gold.gif