The End of the Credit Crisis?
Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/8Rp5vJmc7jk/16934Posted on Wednesday, May 20th, 2009 | In Market Commentary
Rejoice! The credit crisis is over. Sort of… maybe.
Most of the complicated lending spreads that define a crisis in credit have returned to normal levels. For starters today, the mighty “TED spread”
Kind of a mouthful of a chart, eh? In simple terms, the TED spread is the difference, in percentage points, between how much it costs the banks to borrow dollars and how much it costs the U.S. government to do the same. The lower the spread, the more freely money is being lent around the country.
The spread is now at its lowest level since August 2007.
Alan Greenspan’s favored Libor-OIS spread is back to pre-crisis levels, too. This complicated affair of interbank lending compared to overnight index swaps was at 87 when Lehman died, peaked at 364 on Oct. 10 and this morning is barely 52.
Our point? While the crises in employment, housing, banks, stocks and life in general still seem as pertinent as ever, the numbers claim that the credit crisis is a thing of the past… for now, at least.
Source: The End of the Credit Crisis?
Last 5 posts by Contrarian Profits
- The Dollar, the Euro, and being Bullish on Gold - November 20th, 2009
- Audit the Fed – Amendment to a $200 billion bill frightens currency traders! - November 20th, 2009
- What if They Stop Buying our Debt? - November 19th, 2009
- Goldbugs Beware! The tax man cometh! - November 18th, 2009
- Debt – the fall of the U.S. economic empire - November 18th, 2009
Alan Greenspan, contrarian profits, Market Commentary, United States, Us Government
ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.
ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.
Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.
If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.