Thank God it Passed

[Kurt_and_Hunter]

The contingent that mocks supporters of the Fall 2008 bank bail-out with "Thank Gawd it Passed" is a real republican style "Let's mock things that work but are unpopular... heh, heh" phenomenon.

There was a profound credit crisis and most features of it have turned dramatically post-intervention. In the range of economic measures during the last couple of years it was one of the few with readily identifiable positive results. I'm sure it was flawed in many respects... could have been more efficient, better targeted, achieved more psychological bang for the buck, etc. But the same can be said about almost any emergency government action in history. Putting out fires is inelegant. (Firefighters waste and mis-target most of the water, but it's still better than the alternative!)

Credit Crisis Indicators

As Bernanke said today, some progress has been made ...

The yield on 3 month treasuries has risen to 0.30%. Better than zero!

The three month LIBOR has increased to 1.25%. The three-month LIBOR rate peaked (for this cycle) at 4.81875% on Oct. 10. Although this has increased recently, this is still very positive for all those adjusted rate mortgage loans tied to the LIBOR (or treasuries).

The TED spread is at 0.96. Although a normal spread is around 0.5, this is still a significant improvement.



The A2P2 spread as at 1.02. This is a significant improvement from the high of 5.86 after Thanksgiving. The A2P2 spread is at the lowest level since the latest wave of the crisis started in Sept 2008. However this is still fairly high - look at those previous small peaks - those were considered serious at the time. Note: This is the spread between high and low quality 30 day nonfinancial commercial paper.

Federal Reserve Assets: The Federal Reserve released the Factors Affecting Reserve Balances last Thursday. Total assets increased $72.2 billion to $1.92 trillion. The increase was mostly due to the Federal Reserve buying $57.9 billion in mortgage-backed securities (MBS) guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.

After spiking last year to $2.31 trillion the week of Dec 18th, the Federal Reserve assets have declined somewhat. Now it looks like the Federal Reserve is starting to expand their balance sheet again. Note: the graph shows Total Factors Supplying Federal Reserve Funds and is an available series that is close to assets.

These indicators do indicate some progress ...


http://www.calculatedriskblog.com/2009/02/credit-crisis-indicators.html

[WI_DEM]

1. from your title I thought this was about a kidney stone.

[nadinbrzezinski]

2. You bring facts to the table?

thank you... and some will complaint bout the stimulus too, in similar fashion

Will take six to nine months for that to start to be felt

Let me add that LIBOR also dropped

But hey, that is too much inside baseball for most folks who like to jeer this, since they didn't get it

[Kurt_and_Hunter]

4. Nice LIBOR chart at the link. (I only included one chart in the OP)

[Occam Bandage]

3. K&R

[StrongBad]

5. Wow a post with substance and calm analysis.

I bet this one's gonna sink...

[clear eye]

6. All you can say after a bill that ruined the country for 2 generations is

that it's helped a little? You don't think that maybe we'd have gotten a bigger bang for our buck if we'd gotten a revised bill written after a few days of testimony from our nation's top economists, and one that didn't have a no substantive reporting clause written into it so untold billions could go to friends of Paulson's? It would have been a bloody miracle if spending these unimaginable sums hadn't improved things just a bit. But at these prices, we could have clearly afforded single payer health care which would have stimulated the economy much more by making business balance sheets more sound and on a par with businesses in other industrialized nations so banks could lend with confidence, and restored security to the middle class that they could spend w/o being afraid that they'd be wiped out and lose their homes due to an illness. With single payer health care, the U.S. automakers wouldn't be in crisis. If we'd had a saner bill, renters wouldn't be seeing the value of their retirement savings falling like a lead balloon as foreign countries dump their U.S. Treasuries.

That's what the bill you think is above reproach has done for us.