Thursday, June 3, 2010

Surging Bank Rate Stirs Fear of New Credit Meltdown

The London interbank offered rate, or Libor, recently jumped to a 10-month high, and that has some investors worried that a second credit-market meltdown is coming.

The Libor is what banks charge each other for short-term loans. The rate recently increased 12 days in a row amid concern about Europe’s debt crisis.

"The direction is telling you where the economy is heading. It's very bad," says Michael Pento, chief market strategist at Delta Global Advisors.

"We didn't learn much from the 2008-2009 credit crisis,” he told CNBC. (more)

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