The global system is in the grip of a financial crisis with its origins in the U.S. subprime mortgage market. Most accurately, it faces a liquidity-availability problem: There is plenty of money in the system, but banks fear they might never see the money they loaned — even to other banks — again. The natural reaction is thus not to lend. Ultimately, the London Interbank Offered Rate (LIBOR) best encapsulates this nervousness. This is the most broadly quoted interest rate banks charge one another for loans; most of that market is based off of LIBOR one way or another. Normally, LIBOR closely tracks U.S. Federal Reserve System interest rates. But when the liquidity crunch began a few weeks ago, the rate shot through the roof as banks became less willing to lend. The higher the LIBOR rate, the more difficult it is for banks to get loans from peers. The majority of U.S. and European governmental actions since then have aimed to encourage interbank lending. Beginning in the last 24 hours, these actions finally seem to be having some effects and LIBOR has finally started falling. The system is not out of the woods yet — it will take sustained falls in LIBOR before the crisis will be behind us — but the drop is extremely good news. Yet while the LIBOR drop is certainly a much-valued light at the end of the tunnel, the tunnel is neither short nor straight, and there will be casualties along the way. The unwinding of the yen carry trade is sure to throw Japan into a protracted recession. And Europe's banking sector is looking more and more unstable. On Oct. 9, Iceland effectively — and quite dramatically — ceased to exist as a modern economy. And the direness Hungary's situation only became clear today (more on that from us later on Oct. 15). Iceland and a host of other states such as Hungary, Pakistan and Ukraine are almost certainly doomed to seek International Monetary Fund (IMF) assistance to pick up the pieces from the ongoing crisis. Luckily, the IMF has not granted a large-scale loan in some time, and the boom of the past seven years has allowed most IMF borrowers to repay their loans. The IMF is more flush with cash now than it ever has been; it thus can provide just more than $200 billion in immediate assistance. Finally, all the negative news has had a major positive impact in one respect. Oil prices recently have fallen considerably, and Brent crude was down nearly 5 percent ton Oct. 15, or by exactly half its July high. Since naturally it is difficult to engage in economic activity without energy, high energy prices tend to suck the life out of growth as all available capital is used to pay the oil bill. Brent crude at $71.14 a barrel (as of this writing) is certainly not cheap by historic standards, but every dollar it drops grants more money to more productive — and income-earning — pursuits.