thannagan

Credit Crisis Watch: Are the Markets Thawing?

Banks, specifically the largest international banks are obvioulsy not what they used to be years ago. They are riskier (for a variety of reasons). Meanwhile, the Fed's target rates are at resession wartime levels. And, for the moment, global fear-and-panic have bouyed the US$ and Treasury values as stores of safety (relative to other alternatives).

Who says LIBOR rates and TED spreads should be any lower. They probably shuld have been inching higher for several years, now. Risk wasn't properly priced into many things in the last few years or the whole subprime ponzi play would not have happended to begin with.

It's the real economy, now, and the resulting ability of individuals and businesses to make debt service payments - not capital markets.