You might know the Ted Spread definition, but just in case I explain it to you. The Ted Spread is the difference between the risk-free 3-month T-bill interest rate and 3-month LIBOR, and is considered to be a indicator of the overall amount of perceived credit risk in the economy.
Recently TED Spread made a new low. It was the lowest level in 5 years. Many analysts interpret it as a positive signal, but to me it's the signal of bubbly market and too much optimism and investors wishful thinking that it does not reflect the reality. Considering Option ARM tsunami in 2010-2011, commercial real estate, credit card delinquencies and many other bumps in the road it's naive to think everything is fine and good days are back. In general Ted Spread is not a very reliable indicator when there is too much Fed intervention in market.
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