Friday, October 10, 2008

New Levels Of Market Futility

The Credit Markets Remain Frozen and Fear Indicators Reach New Highs

I just wanted to give a quick intra-day update, particularly since today and this weekend represents a critical point in time for our current crisis. Today we have the unwinding of some Lehman paper, and this weekend the G-7.

With the G-7 meeting over the weekend, and President Bush giving a Rose Garden speech to calm the markets anxiety, the indicators of liquidity and anxiety reach new levels.

The Ted Spread, the indicator of liquidity in the credit markets has reached 4.52, with the LIBOR reset this morning at 4.81, up from yesterdays 4.75.

The VIX, that indicator of market fear has reached a new high, almost touching 71.

These indicators are showing us once again that our leaders had best come up with a viable plan that the MARKETS actually believe in, as we are sliding down a slippery slope. We will know if the G-7 can actually come up with a plan that has some legs. I gotta believe that at this point in time there is nothing that is not on the table.

I know this is not happy talk, but I am hoping that these blogs of market turmoil can soon give way to discussions of the mortgage markets and new ways to drive business. Let's all keep our fingers crossed.

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