At one point I became more interested in the question "of the two components that make up the TED Spread, does one move more than the other"? You'd better believe it... it's the LIBOR3 component that is doing all the moving. So rather than focus on the TED Spread, I've recently turned my eye directly onto the trouble spot itself, and that of course
is European debt. So I just watch Libor3 (with the 3 month US treasuries overlaid in the background so I can keep tabs on that one as well). Many of you will recognize the daily chart LIBOR3 as seen below, a chart that on some sites has been dubbed the "rocket chart". I first presented this chart in June when I noticed the moving averages starting to go flat after having fallen for two straight years, then running flat for another two years. Once I saw those moving averages start to cross to the upside, I finally added the annotation "The LIBOR fuse has been lit. Watch out!" And the rest, as they say, is history. Now you know why I went to the trouble to exhibit my considerable chart-art by adding the rocket. There was no doubt in my mind what was coming.
I'm pleased to report that this chart has been very popular no matter where I've displayed it. So I thought I might just as well dedicate one entire post to it and provide a link to the live and updated version. The chart below is static and I may replace it with a new 'snapshot' from time to time as we will continue to monitor this situation right here, on this very post. But you can hit the link to the live and updated version just beneath this chart and check out the status anytime you like. Please note that it isn't updated until a couple of hours after the close of trading each day.
|Ship on Stormy Seas by Ivan Konstantinovich Aivazovsky|