Learn about the TED spread we are so fucked
bill perkins is an obama shilll… and the redsox won a squeeker that they squandered… ball was great I love this weather… but I know it is going to get cold son and the economy well that is another issue
This thing is normally between 0 and 1.00. WE ARE NOW AT 3.61
On September 29, 2008, after the bailout bill was unexpectedly voted down, the TED spread achieved a new high of just over 350bps. On October 2, the TED spread reached 361bps.
SO get INTO SOME bEAR FUNDS THIS tITANIC HIT AND ICE BERG AND THE REVING OF THE ENGINES IS COMING FROM THE LIFE BOATS!!!
TED spread
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TED spread during the subprime mortgage crisis.
The TED spread is the difference between the interest rates on inter-bank loans and short-term U.S. government debt (“T-bills”).
Initially, the TED spread was the difference between the interest rates for three-month U.S. Treasuries contracts and the three month Eurodollars contract as represented by the London Inter Bank Offered Rate (LIBOR). However, since the Chicago Mercantile Exchange dropped T-bill futures, the TED spread is now calculated as the difference between the three-month T-bill interest rate and three-month LIBOR.
The TED spread is an indicator of perceived credit risk in the general economy[1]. This is because T-bills are considered risk-free while LIBOR reflects the credit risk of lending to commercial banks. When the TED spread increases, that is a sign that lenders believe the risk of default on inter-bank loans (also known as counterparty risk) is increasing. Inter-bank lenders therefore demand a higher rate of interest, or accept lower returns on safe investments such as T-bills. When the risk of banks defaults is considered to be decreasing, the TED spread decreases.[2]
TED is an acronym formed from T-Bill and ED, the ticker symbol for the Eurodollar futures contract. The size of the spread is usually denominated in basis points (bps). For example, if the T-Bill rate is 5.10% and ED trades at 5.50%, the TED spread is 40bps. The TED spread fluctuates over time but historically has often remained within the range of 10 and 50 basis points (0.1% and 0.5%), until 2007. A rising TED spread often presages a downturn in the U.S. stock market, as it indicates that liquidity is being withdrawn.
During 2007, the Subprime mortgage crisis ballooned the TED spread to a region of 150-200bps. On September 17, 2008, the record set after the Black Monday crash of 1987 was broken as the TED spread exceeded 300bps.[3] Some higher readings for the spread were due to inability to obtain accurate LIBOR rates in the absence of a liquid unsecured lending market.[4]
On September 29, 2008, after the bailout bill was unexpectedly voted down, the TED spread achieved a new high of just over 350bps. On October 2, the TED spread reached 361bps.
