10-yr swap spreads have really turned the corner

Central banks are really gaining traction in their efforts to improve liquidity conditions. 10-year swap spreads are now lower than they have been at any time since the peak of the housing price bubble about three years ago. At 44 bps today, they are within spitting distance of the 30-40 bps range that we would expect in "normal" times. This tells me that the market is finally able to look out across the valley of the current crisis and see a future than looks much brighter. This is extremely good news.

And all this good news comes amidst a general outpouring of angst over how deep and long the recession we are supposedly in is going to be. You have to be careful of getting your news on TV. That is, unless you watch Larry Kudlow.