Anyone been watching this? Sure has popped the boner the last few weeks. Wonder why? [sarcasm]

http://www.bloomberg.com/apps/quote?tick....

Note spikes in July 2007 and Sept 2008

http://en.wikipedia.org/wiki/File:Ted-Sp....

Around 2:15 PM, the Ted Spread hit 40.1593--a new 10-month high.

It's all FRA/OIS now.

http://www.bloomberg.com/apps/cbuilder?t....


http://www.bloomberg.com/apps/cbuilder?t....

Thanks Pat..

Gold Silver ratio is another good one for monitoring Credit stress

This is the sauce you're looking for-

Doesn't look all that exciting from that perspective.

On the Contrary, Pika. I think it's a leading indicator, like a bad EKG sometimes before a heart attack.

You have to understand that thing (and the now deprecated TED and "Libor/FF" et. al.) had traded in historically tight tight tight bands. A move in FRA/OIS from 16 to 21 was earth-moving. So when it collapsed to 9 while F-I was starting to smell in 2005/2006 it got my attention. When it remained unmoved at 10bps while F-I was pulled the temple down on it's head it was, well, the biggest lay-up in history...

Thanks, Pat. As you indicate, TED, Libor/FF etc. seem to have been....compromised in their indicitive status. That being said, movement in FRA/OIS seems to have retained some integrity and value. In light of that, how are you interpreting this recent move?

I have no doubt there are serious stressors back on the rise in the credit markets, but this indicator to me, still looks rather....blase about the whole thing. At least from a long-term perspective.

It's not a function of integrity, it's a function of tradeability. TED doesn't really reference any specific thing, it encompassed different terms, different issues, blah blah blah. It was difficult to trade and mostly indicative. FRA/OIS (the modern lingo for L/FF) is a very liquid, deep spread that refers to a specific, standardized "thing" that everybody understands. Simple explanation in IRL.

Old friend Ted is moving today

back above 8/20/2010 level

jumping a 25% from 14.35 to 17.95 HOD 18.05

http://www.bloomberg.com/apps/quote?tick....

Padrino, good catch..Pat do you have a link for your sauce to monitor.?

morning move is for the IRX

first indication shows a 17% move down, from yesturday .145 to early morning .12 print

ted at 18.96 or +31% HOD 19.37

IRX print a 0.11% last 0.115%

eurodollar futures /gez0 /geh1 /gem1 flirting with the top

OK, that's a ****ing huge move; -so how does One best play into or against the TED spread?

& how should such a play be hedged?

Is it just Me or does this look like a little Flash Crash happened this morning therein:

Pat thank you.

thanks Pat, so yesturday TEd move was only due the IRX

and the important swaps are coming down

so no alert yet?

I'm right?

thanks again

3M$ FRA / OIS spread new post flash crash high of 36 today.
http://www.bloomberg.com/apps/quote?tick....

Re-test of 50 in order before backing off the rest of the year?

The current stress is International, you need to look at the forward cost of USD in FX space and imply the rate... It's a lot higher than 50.

I was checking out this thread earlier today. Too funny.

Must be something in the air . . . :)

For the clueless like me on the implications of a widening TED Spread:

The TED spread is an indicator of perceived credit risk in the general economy.

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. [Ed. A widening TED spread could also mean that banks want to keep whatever cash they have immediately available and on their balance sheet as cash and not a cash equivalent.]

Thankyou Steelpiston