An interesting calculation in the June 2008 Money magazine is the TED spread, an indication of easy it will be to borrow money. It's the difference between the 3 month LIBOR rate and the 3 month T-bill rate.  The T-bill is essentially risk free and the LIBOR is the rate the banks charge to borrow from one another. If they are nervous about lending to each other, they certainly are more fearful about lending to you and me. They say a difference of .4 % is what we need to see. The latest figures show a spread of .97%, which is a bit more than last month, and a lot more than 1 year ago when it was .41%.

My conclusion: this formula confirms that it is difficult to get loans right now. I already knew that anything but the most pristine of credit, 20% down, conforming loan type buyer was having trouble getting a loan, but this formula shows me why and also how I can know when it is changing.