Comments on: Daily Aid 26: How to understand how the economy is really doing

By: Ralph Sprague

Ralph Sprague — Fri, 17 Oct 2008 15:38:48 +0000

Chris,

Terrific general overview of the stock market and the credit market. I just want to make one minor correction: The TED spread is the difference between the 3-month LIBOR rate and the 3-month Treasury Bill rate. The Federal Funds Rate is not a part of it. The TED spread is especially noteworthy at this time as it hit an all-time record high late last week, indicating an unprecedented unwillingness of banks to lend to each other.

Keep up the good work.

Ralph Sprague

By: TJ Sondermann

TJ Sondermann — Thu, 16 Oct 2008 13:05:56 +0000

Thanks for this Chris. I thought I had a handle on how most of this stuff works, but this really cleared things up.

tjs

By: FERGUS O'ROURKE

FERGUS O'ROURKE — Thu, 16 Oct 2008 12:15:58 +0000

Good introduction to the subject.

One typo:

“Banks don’t trust each other and would rather borrow from the government instead.” should read “would rather lend to”