Friday, September 19, 2008

Krugman on the Crisis

Paul Krugman's op-ed in today's New York Times looks at how the government can get us out of this mess, and just how bad it is:
Thus, banks are normally able to borrow from each other at rates just slightly above the interest rate on U.S. Treasury bills.  But Thursday morning, the average interest rate on three-month interbank borrowing was 3.2 percent, while the interest rate on the corresponding Treasuries was 0.05 percent.  No, that's not a misprint.
[Emphasis mine.]  To quote almost everyone from the Star Wars canon, "I have a bad feeling about this."  But we'll see what happens.

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