It's No Longer The Credit Crunch...Or Is It?

LIBOR numbers this morning were decidedly mixed for once. The overnight rate and TED spread went up slightly while 1-month and 3-month rates registered tiny declines (1.62 BPs and 0.63 BPs) this morning. Given recent declines of 20+ BP, and the fact the LIBOR numbers are still well above bank rates, it means banks may be holding on to their cash again.

Then again, things like Wachovia's nearly $24 billion quarterly loss tends to scare the crap out of banks. Meanwhile, weekly jobless numbers are out this morning and they are bad. It looks like another dismal day on the markets.

Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 478,000 in the week ended Oct 18 from a revised 463,000 the prior week, the Labor Department said.

Analysts polled by Reuters had forecast 470,000 new claims versus a previously reported count of 461,000 the week before.

The Labor Department said that the effects of Hurricane Ike in Texas added roughly 12,000 claims to the total.

"Job losses are clearly getting worse, we think this month we'll see more than 200,000 jobs lost," Nigel Gault, chief U.S. Economist at Global Insight, told Reuters.

That would bring total job loss number this year to close to a million in 10 months, a pretty staggering number considering in the first 9 months there were 750,000 jobs lost or so. 200k in one month is bad...because there's still two months to go this year. Holiday hiring may help reduce these job loss numbers for November and December, but with nearly everybody cutting back on seasonal hiring this year, by the time January hits, things are going to be downright disastrous. Still, over a million jobs lost in one year will be downright mild compared to 2009's totals. You can count on that.