TED Spread Laughs Off the World's Central Banks
A bunch of the world's central banks took "concerted" action today to stem the tide of the European debt crisis. A reasonable informative article in the Wall Street Journal provides some detail. Immediately the stock markets around the world jumped. As of this post, the U.S. stock market is up about 3.6%.
But the TED Spread - that indicator we follow that shows us the state of interbank lending - jumped too. That means that that lending between the world's banks - a fundamental component of the world's financial system - continues to point to trouble ahead. The TED Spread says that liquidity in the system continues to show signs of possibly drying up as it did in 2008.
The stock markets are giddy - about what, I'm not sure. And the TED Spread just laughs at them.
The worrisome part is that the pattern the TED Spread showed before the 2008 crisis seems to be unfolding now.
But the TED Spread - that indicator we follow that shows us the state of interbank lending - jumped too. That means that that lending between the world's banks - a fundamental component of the world's financial system - continues to point to trouble ahead. The TED Spread says that liquidity in the system continues to show signs of possibly drying up as it did in 2008.
The stock markets are giddy - about what, I'm not sure. And the TED Spread just laughs at them.
The worrisome part is that the pattern the TED Spread showed before the 2008 crisis seems to be unfolding now.
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