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• IG On-the-run Spreads (Released 5:02 EST)
• IG6 Spreads (Released 5:02 EST)
• IG7 Spreads (Released 5:02 EST)
• IG8 Spreads (Released 5:02 EST)
• IG9 Spreads (Released 5:02 EST)

IG On-the-run Spreads (Aug 25)

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IG6 Spreads (Aug 25)

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IG7 Spreads (Aug)

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IG8 Spreads (Aug 25)

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IG9 Spreads (Aug 25)

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Moving sideways.

• IG On-the-run Spreads (Released 5:02 EST)
• IG6 Spreads (Released 5:02 EST)
• IG7 Spreads (Released 5:02 EST)
• IG8 Spreads (Released 5:02 EST)
• IG9 Spreads (Released 5:02 EST)

IG On-the-run Spreads (Aug 18)

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IG6 Spreads (Aug 18)

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IG7 Spreads (Aug 18)

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IG8 Spreads (Aug 18)

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IG9 Spreads (Aug 18)

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• IG On-the-run Spreads (Released 5:06 EST)
• IG6 Spreads (Released 5:06 EST)
• IG7 Spreads (Released 5:06 EST)
• IG8 Spreads (Released 5:06 EST)
• IG9 Spreads (Released 5:06 EST)

IG On-the-run Spreads (Aug 11)

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IG6 Spreads (Aug 11)

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IG7 Spreads (Aug 11)

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IG8 Spreads (Aug 11)

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IG9 Spreads (Aug 11)

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Generally up a touch but still looks to be slowly wiggling its way lower.

• IG On-the-run Spreads (Released 5:02 EST)
• IG6 Spreads (Released 5:02 EST)
• IG7 Spreads (Released 5:02 EST)
• IG8 Spreads (Released 5:04 EST)
• IG9 Spreads (Released 5:02 EST)

IG On-the-run Spreads (Aug 4)

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IG6 Spreads (Aug 4)

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IG7 Spreads (Aug 4)

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IG8 Spreads (Aug 4)

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IG9 Spreads (Aug 4)

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>    
>    On Tue, Jul 29, 2008 at 4:05 AM, Andrea wrote:
>    
>    In case you haven’t seen this yet: A Fed study that finds that
>    Taf has lowered Libor.
>    
>    http://www.newyorkfed.org/research/staff_reports/sr335.html
>    
>    

right, thanks, as if they needed to fund a study to figure that out!

It’s like doing a study that shows the repo rate goes down when the fed lowers its ’stop’ on repo.

(Too bad they didn’t use this study to show they should set a rate for the TAF and let quantity float, instead of setting a quantity and having an auction.)

It’s this kind of expense that gives govt. a govt. spending negative connotation.

all the best!

warren

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A touch higher last week, but still seems to be working its way lower.

• IG On-the-run Spreads (Released 10:50 EST)
• IG6 Spreads (Released 10:50 EST)
• IG7 Spreads (Released 10:50 EST)
• IG8 Spreads (Released 10:50 EST)
• IG9 Spreads (Released 10:50 EST)

IG On-the-run Spreads (Jul 25)

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IG6 Spreads (Jul 25)

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IG7 Spreads (Jul 25)

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IG8 Spreads (Jul 25)

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IG9 Spreads (Jul 25)

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Summation of Commercial Paper Outstanding AND Combined Commercial and Industrial Loans Outstanding

Combined commercial and industrial loans and commercial paper show a leveling off after the initial drop.

Back in mid 2006, I remember commenting that I thought the government deficit was no longer high enough (given everything else that was going on) to support the credit structure.

The last push up was largely a product of fraudulently obtained sub prime and Alt-A loans.

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Looks and feels like spreads will be generally narrowing for a considerable period of time.

Bank earnings are better than expected with revenues growing nicely.

GDP, income, and spending being sustained by a growing government budget deficit, exports, and housing leveling off and no longer subtracting from growth.

‘Inflation’ continues with Saudi’s supporting prices and pass-throughs intensifying.

• IG On-the-run Spreads (Released 5:44 EST)
• IG6 Spreads (Released 5:44 EST)
• IG7 Spreads (Released 5:44 EST)
• IG8 Spreads (Released 5:44 EST)
• IG9 Spreads (Released 5:44 EST)

IG On-the-run Spreads (Jul 18)

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IG6 Spreads (Jul 18)

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IG7 Spreads (Jul 18)

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IG8 Spreads (Jul 18)

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IG9 Spreads (Jul 18)

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• IG On-the-run Spreads (Released 5:44 EST)
• IG6 Spreads (Released 5:44 EST)
• IG7 Spreads (Released 5:44 EST)
• IG8 Spreads (Released 5:44 EST)
• IG9 Spreads (Released 5:44 EST)

IG On-the-run Spreads (Jul 14)

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IG6 Spreads (Jul 14)

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IG7 Spreads (Jul 7)

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IG8 Spreads (Jul 14)

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IG9 Spreads (Jul 14)

First Bear Stearns, and now the agencies confirm the government is there to ‘write the check’; so, I expect credit spreads to continue to narrow over time.

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• IG On-the-run Spreads (Released 5:41 EST)
• IG6 Spreads (Released 5:41 EST)
• IG7 Spreads (Released 5:41 EST)
• IG8 Spreads (Released 5:41 EST)
• IG9 Spreads (Released 5:41 EST)

IG On-the-run Spreads (Jul 7)

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IG6 Spreads (Jul 7)

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IG7 Spreads (Jul 7)

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IG8 Spreads (Jul 7)

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IG9 Spreads (Jul 7)

Still working its way higher.

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IG On-the-run Spreads

IG6 Spreads

IG7 Spreads

IG8 Spreads

IG9 Spreads

Looks to be slowly zigging and zagging its way higher.

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IG On-the-run Spreads

IG6 Spreads

IG7 Spreads

IG8 Spreads

IG9 Spreads

The wiggles down give the Fed comfort that markets are functioning to price risk.

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IG On-the-run Spreads

IG6 Spreads

IG7 Spreads

IG8 Spreads

IG9 Spreads

Slowly drifting higher, but well below previous crisis levels.

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Consumer Credit

Moving up some, supporting spending at muddle through ‘better than recession’ levels, but not a bubble yet, as happened at the turn of the century.

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IG On-the-run Spreads

IG6 Spreads

IG7 Spreads

IG8 Spreads

IG9 Spreads

Pricing of risk looking more like it’s settling into a range.

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Might be settling into a trading range.

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Giving comfort to the Fed.

‘Automatically’ moves their focus to inflation.

On-the-run Spreads

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IG6 Spreads

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IG7 Spreads

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IG8 Spreads

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IG On-the-run Spreads

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IG6 Spreads

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IG7 Spreads

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IG8 Spreads

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IG9 Spreads

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(an interoffice email)

A few observations:

1) when chart 1 peaked in 5/01, we still had six months of recession to deal
with and the Fed didn’t stop cutting until 12/01 at 1.75%.
2) data only goes back to 1990, but the 5/90 peak was BEFORE the recession even
started, it didn’t end until 3/91 and the Fed didn’t stop cutting until 8/92 @
3%.
3) EDM9 has two + hikes priced in (three at the recent lows).  the EDZ8 thru
EDU9 part of the eurodollar curve seems awfully cheap to me.
*FED REPORTS NEAR-RECORD PACE OF BANKS TIGHTENING LOAN TERMS
*FED SAYS CONSUMER, BUSINESS LOANS WEAKER FOR PAST THREE MONTHS
*FED SAYS 55% OF BANKS TOUGHENED BUSINESS LENDING SINCE JANUARY
*FED SURVEY GAUGES LENDING POLICY BY 56 U.S., 21 OVERSEAS BANKS
*FED SAYS DEMAND MORE RESTRAINED FOR CONSUMER, BUSINESS LOANS
*FED SENIOR LOAN OFFICERS SURVEY COVERS PAST THREE MONTHS

==============================================================================
April   Jan.   Oct.   July  April   Jan.   Oct.   July
2008   2008   2007   2007   2007   2007   2006   2006
===============================================================================
——————Percentage of Total——————
Large & mid-market      100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Tightened considerably   3.6%   1.8%   1.9%   0.0%   0.0%   0.0%   0.0%   0.0%
Tightened somewhat      51.8%  30.4%  17.3%   9.4%   3.8%   5.3%   7.4%   5.4%
Basically unchanged     44.6%  67.9%  80.8%  88.7%  88.7%  89.5%  85.2%  80.4%
Eased somewhat           0.0%   0.0%   0.0%   1.9%   7.5%   5.3%   7.4%  14.3%
Eased considerably       0.0%   0.0%   0.0%   0.0%   0.0%   0.0%   0.0%   0.0%
——————–Number of Banks——————–
Large & mid-market          56     56     52     53     53     57     54     56
Tightened considerably      2      1      1      0      0      0      0      0
Tightened somewhat         29     17      9      5      2      3      4      3
Basically unchanged        25     38     42     47     47     51     46     45
Eased somewhat              0      0      0      1      4      3      4      8
Eased considerably          0      0      0      0      0      0      0      0
===============================================================================
NOTE: Large and middle-market firms are those with annual sales of $50 million
or more.

SOURCE: Federal Reserve  FRBA <GO>

Thanks,

Don’t forget to add ‘and the economy is improving’ with GDP looking a lot like it bottomed in Q4.

With fiscal adding a quick $170 billion or so of net financial assets/spending power to demand over the next few months watch for additional price pressures across the board.

IG On-the-run Spreads

IG6 Spreads

IG7 Spreads

IG8 Spreads

IG9 Spreads