Observers question how long money market woes will last

10/1/2008 | Financial Times (free content)

Money market observers are debating how far government intervention, like the proposed $700 billion rescue plan in the U.S., will go in unlocking credit markets. "No one wants to buy financial paper and even with government help, the system could remain at a dysfunctional level," said Jim Paulsen, chief investment strategist at Wells Capital Management. During downturns in 1987 and 1998, dislocation between Libor, Fed funds and Treasury bills lasted for two months.

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