Monday, December 15, 2008
After peaking at 470 bps on October 10th, the TED spread dropped to the low 200s in early November, then appeared unable to make further progress until about a week ago. The yield on 3-mo. T-bills is stuck at zero, but Libor is coming down. That tells us that confidence in the banking system is improving. Other spreads such as swap and agency spreads are also making slow but positive progress. That the markets continue to heal is good news.
Posted by Scott Grannis at 3:18 PM