The recent drop in global markets resembles an Atlantic hurricane. The immediate impact of a storm is obvious and sometimes frightening. Life courses can be altered, usually for the worse. Most storms don’t capture our attention and there are many each and every year. But when a category 4-5 hits everyone is watching.  Storms in 2008

We just had a category 5 financial hurricane. There is some good evidence to suggest that the storm has passed. At this point governments across the financial world have guaranteed inter-bank receivables. As a direct result, In my opinion, it is unlikely that we will see another large financial insolvency as a result of this credit crises.

 The TED spread measure is the ratio of 90 day US treasury Bill to LIBOR, the London inter bank offered rate of interest.

The spread has now narrowed to 248 today and continues to fall. Banks are much more likely to lend to each other with a federal government guaranteeing the contract.

Financial storm damages are borne by investors across the world. Unlike an Atlantic hurricane the largest losses are experienced by those that sell and run.