Tight credit markets (Increases in 3 month LIBOR, ON LIBOR). How to stop the rising cost of short term borrowing?

Tight credit markets and pessimism led to a brutal day in the markets. Dow tumbled 7%. Estimates for car sales were awful, crushing auto-makers. GM plunged 31%. 3 month LIBOR was up 43 basis points to 4.75%. Overnight Libor was up 1.16 percentage points to 5.09%. Recall LIBOR rates doubled the day after the Lehman bankruptcy.