Twitter listener @saalon starts us off today: The TED spread has fallen below one! This key measure of anxiety among banks crept toward the unholy height of five during the worst of the economic crisis last fall. Now, it has finally re-entered the safer zone of sub-one. It's at .98 — the widget on our right rail should catch up soon. Meanwhile, open the bubbly, I guess.
More news: Credit crunch over? Best week for debt sales in a year/ Obama shelves jobs-credit proposal/ Trade deficit down sharply
After the jump, Ian Shepherdson's morning note, this time on the drop in trade.
The November trade deficit plunged to just $40.4B from $56.7B, far below the $51B consensus and the smallest gap since Nov 03.
As far as we can tell, trade flows have been crushed by the credit crunch, which has reduced demand for traded goods and services and made it more difficult for exporters and imports to obtain trade finance. The result is that the data have become impossible to forecast. We now reckon real Q4 exports fell 27% . . . with imports down 16%.
Shepherdson says much of the change in trade has to do with a swift decline in oil imports — demand has fallen as the recession has taken hold.