Monday, September 7, 2009

Fed and Ted's Excellent Adventure.

The TED spread (difference between LIBOR rates and T-bill rates, with the three-month duration being the most commonly cited gauge of the interbank lending market's condition) has been all types of crazy over the last year. A new paper out of the San Fran Fed claims that the LIBOR rate is being artificially suppressed by actions taken by the FED.

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