TED Spread

This is an important indicator right now. The TED spread is the difference between interest rates for euros and dollars. When credit is healthy, it is low (like 1 or 2). It was at a 5 but is now down to like 2.7.

Here's a link to what the TED spread is:
http://en.wikipedia.org/wiki/TED_spread

You can check it on Bloomberg:
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND

The credit market is abating. That ends the surreal part of this crisis. Now we still have a lot of credit default swaps and mortgaged based derivatives out there, so there's going to be more turmoil on Wall Street for a little while. That could still be sort of weird.

After that, it's just a recession. We have them. It's not the end of the world.

The thing to be afraid of in all of this is that our entire economy is just based on a series of bad idea. There are plenty more problems that could through us into future recessions. Unregulated free market capitalism is dangerous in the long run. Investors know this, but got greedy with deregulation.

I am hopeful about the economy in the long run if the next government is smart about regulating some of these dangerous financial products. Otherwise, we have bad problems.

Good thing Obama's going to win! Who knows, but he's much more likely to stand up to the Wall Street lobbyists and update the regulatory framework.

I take great comfort in the fact that Warren Buffett has been giving council to Obama. For real. At least we know that someone is giving him an elite education in the issues.