The credit markets might not be quite as squeezed as they have been recently, thanks to the Federal Reserve's interest rate cut. But they're hardly back to normal.
In two signs of continued strain, a key bank-to-bank lending rate rose Thursday and the amount of commercial paper in the market fell for the fourth straight week to 15 percent below the level before the investment bank Lehman Brothers Holdings Inc. filed for bankruptcy.
While lending doesn't appear to be in the same seized-up state as last week, the year-end could prove a difficult time for funding as banks and other institutions try to get their books in order, saysKim Rupert, managing director of global fixed income analysis at Action Economics.
"Short term funding is how the world does business," adds Tim Seymour. "I think we could be entering the danger zone."
But Rupert is a little more optimistic. "It looks like the central bank's actions are starting to help marginally improve confidence but it's only one small step so far. It's going to be a very jagged type of improvement. There's still a lot of factors that are going to keep anxiety at elevated levels."
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Trader disclosure: On Oct.9, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns, (AAPL), (EOG), (EXM), (FTO), (FCX), (GS), (MA), (NOV), (POT), (X), (VLO); Jon Najarian Owns C preferred, WFC preferred, JPM preferred; Karabell Owns (MS), (JPM), (IBM), (AAPL), (GOOG), (FCX), (GLD), (CAT), (AGU); Seymour Owns (MER), (F), (BX) (GE)
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