The credit squeeze is still very real. I spoke with some clients today that had their credit lines taken away from them - to the tune of 100 million.
The 3-month Overnight Index Swap is still sitting at 1.12 - meaning that banks are getting lots of cash from the Fed at the discount window, but they're not loaning anything amongst each other. The Fed will have to figure out how to get the banks to loan. If they don't, then we will see the Fed take controlling interest in some of the bigger banks in order to force the situation.
Which bank are your clients with?