The TED spread this morning has fallen to 3.83. LIBOR is also continuing down, though not as much - but down is down. This is good; we can only hope it continues as a trend. You'd sure hope so with Fed liquidity at US$784.5 Billion as of Wednesday. (My traditional source for measuring this no longer works usefully, since so much of it is now simply ad hoc.) The stock markets are what would traditionally be thought of as extremely volatile but in recent terms not so much, and are currently trading around flat. (Remember, "down 400" is the new "up.") Oil is recovering a bit of its massive losses, still at half price vs. a year ago. 10-year T-bills are in light selloff. Dollar index is volatile but not moving in any decisive direction; Yen and Canadian dollar are both off their recent lows.
I suppose it's meaningless now, but I finally looked at the October 8 H.3 bank reserves report, and nonborrowed reserves at US banks fell to US$-363.5 Billion. Back then, they were only borrowing half a billion from the Fed, so one presumes you can expect it to drop another few hundred billion by the next report, and after that, who knows? Maybe they can go for a trillion! 24/7 Wall Street calls it armed robbery. The Mess that Greenspan Made says Fed so-called lending could hit 3T by EOY2008. Good times!
It doesn't inspire confidence, though. Particularly since the non-financial economy took it in the gut last month. That polling data I mentioned earlier is starting to show up in official numbers, as overall consumer sentiment fell in October at the fastest rate ever, to 57.5 from 70.3. Current conditions sentiment is at the lowest number in the history of the poll. Housing starts continue to plummet, which is actually good since the market is oversupplied, but bad for construction workers.
I mention this because I thought they were a pretty good store, with a name that prompted a series of geeky math injokes: N is now approaching 0 as Linens N Things is going out of business. Permanently. This isn't a bankruptcy reorganisation; liquidation sales start immediately.
I mention this because of the "huh, wow" involved; Countrywide has decided to ignore the State of Illinois's ruling revoking their license to issue new loans in the state, relying instead on their Federal charter.
By the way, the Federal Reserve still can't hit their supposed target rate, tho' with the newtype definition of "anything within 75 basis points" they are. But I have to express my lack of support for bullshit like that. Whenever you're talking lessons from the Italian fascist movement (who made the trains run on time by declaring +/- 1 hour to be "on time"), I feel all skeevy. In a strange intersection of skeeviness, Mish has hard questions for "Joe the Plumber," such as, "If you can't pay your tax bills how are you going to buy out your employer?" He also sees food prices falling, based on falling general commodity prices. See, deflation's not all bad.
eta: at 13:37 Eastern, which I report that way solely because it is l33t time, the TED had fallen to 3.53. The LIBOR is not moving as solidly, which is somewhat confusing.