Comments on: Ted Spread Improves

By: Mark E Hoffer

Mark E Hoffer — Fri, 31 Oct 2008 04:20:01 +0000

OT: as others, above, have stated: “new site off to a good jump” , and I was just thinking to myself: “this place is much more chill..”, a major +
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The LIBOR fixation is, simply, just a another distraction..though, It’s (not) funny that these posts (on major Market internals) get so little traffic v. the poli-sci-fi ‘ink blots’, like “Adam Smith was a Socialist”.

Talk about “Programmed to Receive”…

By: johnny

johnny — Fri, 31 Oct 2008 03:59:57 +0000

I imagine it’s a reliable measure of possible bank failure though it looks to be a trailing. With all of the fed intervention, bets on some big headline failures is a losing trade. Need to wait until this fit of pessimism abates and people become too cavalier. Actually all markets/indices are trailing indicators.

Lets see if TBP lets me post.

By: Benjamin Walthrop

Benjamin Walthrop — Thu, 30 Oct 2008 22:51:52 +0000

With CBs (particularly the Federal Reserve) embracing their role of lender of last resort to the extent that they may now be the lender of first, last, and only resort is the TED spread really a reliable measure of credit liquidity anymore?

By: gdm

gdm — Thu, 30 Oct 2008 19:54:40 +0000

The TED coming in is in fact extremely significant. There are a couple of caveats, however:

(1) At 2.6447% today TED is down a bunch from 4.4687% on 10/10 but it is above the trough of 2.5617% on 10/22 (this graph looks to be from 10/23 when it first ticked up, going up to 2.8722% yesterday before retreating a bit today).

(2) Libor is a fiction. ICAP’s 3-month NY Funding Rate is slightly better, and the TED using NYFR looks slightly worse: 2.8472% today vs trough of 2.6897 on 10/23 and peak of 4.5464% on 10/10.

(3) TED, no matter how measured, is MUCH higher than it normally would be, indicating stresses, though reduced, are still very high. We are still well above where we were before LEH went bust (1.3444% on 9/12 using Libor) and an average of 6-25bps from 2000-2006.

(4) The equivalent TED for corporates (spread of BBB Insustrials to 10-yr Treasuries) is still very high. It reached its peak yesterday (so far) at 4.1669% and is down slightly at 4.0783% today, but that’s up from 3.5158% on 10/10 when the interbank spreads were peaking (and 1.3% before credit crisis hit).

Point 4 is what worries me the most: only those markets where the Fed/Treasury has directly intervened in have shown improvement. Yes interbank lending (now guaranteed) is better and commercial paper (now bought by Fed) ticked up some, but in areas where the government hasn’t yet stepped in (corporate bonds, equities, home prices, commodity prices) we are still seeing the impact of deleveraging, pessimism, downward revisions to expectations, and extreme risk aversion.

By: Sid

Sid — Thu, 30 Oct 2008 19:25:05 +0000

TED spread coming in is quite significant

By: Mind

Mind — Thu, 30 Oct 2008 19:12:29 +0000

Very positive changes. However, I agree that the graphics on the top will soon become extraneous and will mean nothing to repeat visitors – are they dynamic? If not, you might consider making them dynamic – i.e., change the graphics throughout the week and/or day from a database of timely, interesting images – think what you could do – you could have “themes”, etc. Otherwise…

By: SeekingAlpha

SeekingAlpha — Thu, 30 Oct 2008 18:41:42 +0000

We love it and will copy it shortly!

By: Clay Ward

Clay Ward — Thu, 30 Oct 2008 17:42:05 +0000

Barry,

Great job on this new web site. I just took a brief tour. It is excellent including your content, as always.
Please know you are much appreciated.
Kindest regards,
Clay

By: rob

rob — Thu, 30 Oct 2008 17:36:28 +0000

I also like the new look, much cleaner, easy on the eyes.

By: John bruso

John bruso — Thu, 30 Oct 2008 17:16:17 +0000

Carlos,

I agree about the top banner. It’s slick, but I think the same effect could be achieved at 40% of the size.

The banner is 280 pixels high… I think it could easily go to 140 and still be effective.

John