Variable-rate note market now freezing-sources

``the market for variable-rate demand notes has split in two, with credit-worthy paper at times fetching yields that are lower than the approximately 2.5 percent rate that previously prevailed for most of this debt. Less desirable notes now trade at yields of 6 percent and even higher... This phenomenon has shocked investors because variable-rate demand notes have safeguards -- letters of credit and standby purchase agreements.'' -- Sounds like a vote of confidence on the banks and the monolines.