Thursday, January 15, 2009

Are we calming?

The TED Spread is under 100 bp (just). And my colleague Raphael Bostic points out that intra-day stock price volatility has dropped precipitously. Perhaps soon-to-be- President Obama is soothing us?

1 comment:

Anonymous said...

Reliance on TED as a indicator of confidence reminds me of the textbook definitions of liquidity a few years ago which turned out to be wrong (at least this decade). The TED spread also strikes me as a perhaps too much relied upon as a confidence litmus. What will happen to this spread and interbank borrowing rates when the market absorbs the enormous Treasury bond issuance in coming years. Nobody can really say. What will the TEd spread being indicating given the profound impact the issuance will cause both here and abroad. Beats me.