Spreads continue to narrow

Swap spreads have tightened across the board. The TED spread today is 316 bps, down about 150 bps from its recent all-time high. Spreads are still very high by historical standards, but the improvement in the past few weeks is extremely positive. This is a sign that the logjam in the fixed income market is breaking up. This is a good leading indicator for the health of financial markets in general, and is adding to the case that we've seen the worst.