More signs that rescue efforts are gaining traction:
Yesterday the Fed began buying Commercial Paper (a popular way for many larger corporations to fund their short-term cash needs), and CP issuance jumped to a record daily high of $67 billion. Yields on 90-day financial CP (the only part of the CP market that had collapsed in recent months) fell sharply as issuance soared. New money is getting into the system, and this should reassure markets that there are fewer default landmines out there waiting to blow up unsuspecting investors.
The VIX index has retreated to 70 today, down from its high of 90 last Friday. Swap spreads are still high, but moving down in fits and starts. Likewise the TED spread. The Fed funds rate is a mere 0.5%, a sign that the Fed is happy to supply cheap money to whomever wants it, and that in turn means they are likely to lower the official target rate tomorrow.
Stocks may be picking up on the good news. The Dow is up 10% from its intraday, panicked low on October 10th.
UPDATE: Looks like the Dow today closed 15% above its Oct. 10th low.