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The "TED" Spread is the difference between 3 month US Treasury Yields and 3 month LIBOR. I have attached the chart below to show the implied risks associated with recent spreads widening. Three month LIBOR closed at 2.80% on Friday. In addition to creating a widening TED spread, this is the highest it has traded over Fed funds since 1999.

Despite my being bullish on the US Market's immediate term "Trade", this remains one of the main reasons why I am negative on the intermediate "Trend". Credit risk remains a structural issue. Until this spread narrows again, investors, companies, and countries alike with the largest cash (liquidity) position will win this game of monopoly.

As the TED spread widens, the risk of defaults and bankruptcies continues to heighten. The global bankruptcy cycle is in its early stage.
KM
Research Edge Chart by Andrew Barber, Director