TED Spread

Risk in the financial markets is high. I know, that's an obvious point. But, seriously, risk is very high. The TED spread is now at its highest since October 1987. And you remember October 1987, right?The TED in TED spread stands for…

You would think that after the biggest bailout in financial history, one could breathe a sigh of relief. However, as I write this post, the markets are getting pummeled, financial stocks in particular. What is clear from the TED spread is…

Berkshire Hathaway, the company led by Warren Buffett, is offering a five-year debt deal for the highest spread over treasurys in its history. As Berkshire is a low-risk AAA company, this fact reinforces the magnitude of credit market…

As the economy hits stall speed, it is only to be expected that corporate default rates are set to rise. In fact, they have risen already, doubling since 2007.Through last week, 42 companies, all but one based in the U.S., have defaulted,…

Monetary policy has never been so interesting. With price increases in food and energy causing upheaval around the globe, citizens of the world are crying out for policy makers to get a handle on inflation. Yet, the global banking system…

Wow! That was an exciting, but stomach churning day in the markets. The Dow was way down, 358 points. Oil soared to a new high over $140 a barrel. The Euro hit a record against the yen. The TED spread is rising. Did I miss anything?…

As we get ready for another grueling weak in the markets, one can see that market risk is high. Weekends are always a time of great nerves because there are no trades to validate or question one's market view. However, this weekend is…

Global financial institutions are deleveraging because they can't build enough equity capital any other way except by going to Asian and Middle Eastern sovereign wealth funds, cap in hand. So, the Fed and the Bank of England (BoE) have…

Well, even though the data in the real economy is looking pretty bad. There is good news. The Ted Spread is at a 9-month low. That should be very supportive of capital markets over the near term."Lending confidence at banks rose to the…

Despite stock markets being lower the last few days, there are some bright spots in he macro picture. On Feb 24th, I mentioned that risk in the markets was high as suggested by the Ted spread. (The TED spread measures the gap between the…