Though this chart doesn’t show it, the TED spread has made a new all-time high, 412 basis points:

Click image for sharper view. Source: Bloomberg

Bloomberg reports that interbank lending rates around the world in all different currencies are at or near their highs of the year. This fact, along with the lack of oomph in any of the equity markets’ attempts at bounces, suggests that even this stage of the Panic of ‘08 may not be over.

Central banks are being humbled because this is not a liquidity problem, but a solvency problem on a scale much greater than their combined, newly-expanded balance sheets. Not only that, but the market knows that solvency is the issue and is unwilling to resume borrowing and lending as though nothing has happened.

The only cure is time and lower prices. The banks have been propped up, but the real economy cannot be.