TED Spread update
The TED Spread measures the difference between the 3 month LIBOR and 3 month T-bill. The TED Spread is considered ‘normal’ when it is below 50 basis points. Here is a multi-year chart of the TED Spread going back to 2006 (source: Bloomberg)
The TED spread increased from the mid-teens to 50 basis points in the second quarter of 2010, and has since lowered to the mid-30s – within our ‘normal’ range. Can you guess when Lehman Brothers filed bankruptcy? The TED Spread spiked to over 400 basis points that week.
Filed under: General
Posted on July 19th, 2010 by Bob Brinker