Attention equities: swap spreads are falling!

I sure hope this chart ends up working. Swap spreads continue to decline across the board, and that should be very good news for financial markets in general, since it means that confidence is rising, fear is declining, and liquidity is returning to the fixed-income market. Equities have yet to figure this out, unfortunately. Right now everyone seems obsessed with the likelihood that politicians will continue to make mistakes.

Call it fear of bumbling bailout bureaucrats, and fear of Obamanomics.

Message to Obama: keep a sharp eye on the markets. They are telling you that GM bailouts, a refusal to sign free trade agreements, and a threatened increase in taxes on capital and the wealthy are not a prescription for recovery.