The Number That Matters

It's not the Dow or the S&P.  It's LIBOR.

Father A. remembers, through something of a haze, a time in his life when the London Interbank Offering Rate came up fairly often around the office.  It was years ago, when he worked as a nocturnal peon at an international law firm, dated the wrong woman, and studied theology by day -- sleeping, if at all, on the train from Manhattan to Princeton.  But that was in another country, and besides, the wench is ... well, living in Virginia somewhere.

For those who don't know, LIBOR is the interest rate at which banks lend each other money -- a fundamental building block of real capitalism.  Click up top for a summary in plain English.  We have always believed what James Fallows says in his blog today -- that the press pays too much attention to the daily fluctuations of the stock market.  Those daily (or even weekly) ups and downs aren't a measure of much at all, and they have meant less and less as the market has become increasingly volatile over the years.  But LIBOR matters, especially now.  It tells you, at a glance, whether there is credit available to lubricate the wheels on international commerce. 

Fallows, by the way, has a strong recommendation for the presidential candidate(s). We are at a moment of economic crisis, he says, in which reasoned discussion is urgent. He adds:

To have the discussion distracted by -- well, it would be nice to be even-handed about this, but the truth is that the distraction has been 99% from the McCain side, with the ongoing crap about the Weathermen in the 1960s -- is suicidal.

And suicide, we might add, is a sin.