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Credit Thaw


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TED has dipped all the way down to .62!!!

remember numbers in the 30s would be concidered normal risk or kind of low risk.

bonds are being issued at much faster rates right now.

I wanted to find an article to commemerate this drop out there in the media and this one here looks like a good one.

http://www.investmentpostcards.com/2009/05...orthy-progress/

it is from a couple days ago so the TED number was .67 at the time not todays .62

EDIT a bere 6 hours later...

TED is now at .58

this should demonstrate just how quickly the perception of risk can change in the econemy and in capitol markes.

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TED has dipped all the way down to .62!!!

remember numbers in the 30s would be concidered normal risk or kind of low risk.

bonds are being issued at much faster rates right now.

I wanted to find an article to commemerate this drop out there in the media and this one here looks like a good one.

http://www.investmentpostcards.com/2009/05...orthy-progress/

it is from a couple days ago so the TED number was .67 at the time not todays .62

EDIT a bere 6 hours later...

TED is now at .58

this should demonstrate just how quickly the perception of risk can change in the econemy and in capitol markes.

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  • 1 month later...

Its funny how things are steadily evolving.

the indicators are pretty much back to "normal" levels, so the implied risk is relatively low, but obviously there is not a heck of a lot of lending going on as made evident by recent quarterly reports coming from the financial institutions.

a mid sized regional bank here in new england gained over 400 million in deposits this quarter, but apparently must not have lent much out since their loan portfolio shrunk by 500 million. typically in the good times, the bank would have put that 400 million in deposits and put it to work as income creating loans. instead they not only failed to invest here, they did not re-invest maturing debt to the tune of 500 million. just this one small bank chose not to put say 800 million to work in leans this quarter. Imagine that this is happening on the same scale all over the country.

in fairness to the bank they also announced plans to pay back the 400 million in TARP funds they accepted, and there are far less worthy borrowers than in the past. and most importantly to the bank, their stock has lept upwards as they continue to hoard money and not lend it out.

so the fault ultimately falls on investors for valuing cash over income at this stage.

also paper is drying up still and thats just no good.

so many companies are making the turn for the better, but the financial system is still clogged.

TED is at .34 today

and the volitility index is down to 25.31

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  • 3 weeks later...

ok guys and dolls, I bring an update the the year long credit freeze.

its, up for lack of a better word over.

ok there are better words. it is temporarily fully flowing. this may end, but recent jumps in issuance of debt indicate the floodgates are open.

and now you ask yourself.. but what? when? where?

and I will concede that the gates are not open at the consumer level quite yet, but at the institutional level they are pretty well open. the consumer is the last one in the party, so be patient, the credit is flowing your way.

Key points:

borrowing costs are comperable to what they were in 2007

according to bloomberg, Issuance reached 23.3 Billion versus 13.8 Billion last week.

Demand for corporate rated bonds is near record highs. it is a "sellers market"

yields relative to Treasuries narrowed to 257BPS wich is June 2008 levels (this is the cost of the bonds to the issuer or 2.57% more than treasuries yield)

so this is a very good sign. this week. mind you the door may close next week, or even open further. a damn good start though

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