Sullivan is surprised.  I’m not.

The TED spread was stuck above 2.0 for some time. The peak was 4.63 on Oct 10th. The TED spread has finally moved below 1.0, although a normal spread is around 0.5.

Other indicators are also looking better:

The A2P2 spread as at 2.23. This spread has seen a huge decline in 2009. This is far lower than the record (for this cycle) of 5.86 after Thanksgiving, but still way too high.

This is the spread between high and low quality 30 day nonfinancial commercial paper. Right now quality 30 day nonfinancial paper is yielding close to zero. If the credit crisis eases, I’d expect a significant further decline in this spread – although this is good progress.

No word yet whether CNN will trot out pundit after pundit to sarcastically deride anyone who thought the bailout wasn’t working.  Also no word whether any DKos front-pagers will be writing any I’m-not-quite-the-mr-smarty-pants-i-pretended-I-was posts.

The fact of the matter is, we did something really quick and dirty, and it probably saved the nation from a serious financial disaster.  Having said that, does this mean Paulson and Co. didn’t make any mistakes?  Absolutely not.  There are a lot of things that need fixing.  More emphasis needs to be placed on restrictions/conditions for financial institutions that receive government money.  We also need more help to mitigate home foreclosures.  But to dismiss the entire thing out-of-hand because of these errors is ridiculous.

But, you know, nuance and graphs of obscure financial indicators doesn’t really make good television, so…

Tags: bailout

This entry was posted on Wednesday, January 14th, 2009 at 11:45 pm and is filed under Some Pulp. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.