The 3 year US treasury spread (difference between US 3 year treasuries rate and the interbank loan rate), at a low of 47.75 today, has hit a normal level. FINALLY!!! The "TED Spread" (same principle but with 3 month US treasuries), currently at 1.25, is still a bit high, but way down from its peak.
The US 3 year spread is probably ahead of the curve because the demand of these instruments is higher than the 3 month treasuries, driving prices up to meet the interbank loan rate, as opposed to the interbank loan rate dropping to meet it.
This still means that the cost to a business to get a loan is approaching normal levels indicating that the seizing of the financial gears of our economy has ended. I think this recession will be shorter than most predictions as money is now flowing into the private economy!
Let the record show that I spy the reversal of our misfortunes and it is during Bush's term!
You can bet that they'll still credit Obama.
Politics and Technology.
Thursday, January 8, 2009
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