Tuesday, December 16, 2008

Markos, Meet TED

Markos, here's the TED Spread. It measures how hard it is for banks to get loans from other banks. This is what had Krugman and all the economists flipping out about a gigantic credit freeze that would make it impossible for people to get paid. They thought money might get so tight that banks wouldn't even loan money to banks, let alone ordinary businesses. Without businesses getting credit, people don't get their paychecks.

The TED Spread, historically below 0.5%, hit 4.5%. Then we bailed out the banks, and it went straight down. Now it's below 2%. In one notable case, it took Barack Obama shaking his jaw at Bank of America and an idiot door and window company, but in general people got their money. Without any government intervention, goodness knows where we end up. Maybe Harry and Nancy didn't get the best imaginable deal on the bailout, but they averted disaster and people got paid.
Post a Comment