TED Spread has improved somewhat in the last two weeks. Bloomberg: "Yields indicate banks are more willing to lend than they were two weeks ago. The difference between what they and the Treasury pay to borrow money for three months, the so-called TED spread, narrowed to 2.68 percentage points from a high of 4.64 percent Oct. 10."
Translation: Credit markets have thawed a little in the last two weeks. TED Spread Ticker on Bloomberg.
Unfortunately, international shipping is still slowing down to the the widespread disappearance of letters of credit:
"Suppliers of oil, coal, grains and consumer products from Chicago to Mumbai are losing sales as the credit crisis spreads beyond financial institutions, and banks refuse financing or increase the fees for buyers. Coupled with declining demand, the credit squeeze is threatening international trade, one of the lone bright spots in the global economy.
``It's like standing on a beach watching a tsunami, knowing that it's coming,'' said Scott Stevenson, manager of the International Finance Corp.'s Global Trade Finance Program. IFC is the World Bank's private lending arm.
Emerging markets such as Brazil, Vietnam and South Africa are particularly vulnerable because buyers have more trouble proving their financial strength. The slowdown is also damaging the U.S., the world's largest economy, where exports accounted for almost two-thirds of the 2.1 percent growth in gross domestic product in the 12 months through June, according to the U.S. Trade Representative's office. .." Shipping Continues To Fall
``It's like standing on a beach watching a tsunami, knowing that it's coming,'' said Scott Stevenson, manager of the International Finance Corp.'s Global Trade Finance Program. IFC is the World Bank's private lending arm.
Emerging markets such as Brazil, Vietnam and South Africa are particularly vulnerable because buyers have more trouble proving their financial strength. The slowdown is also damaging the U.S., the world's largest economy, where exports accounted for almost two-thirds of the 2.1 percent growth in gross domestic product in the 12 months through June, according to the U.S. Trade Representative's office. .." Shipping Continues To Fall
Note: TED Spread is difference between interest rates on 3 month T bills and LIBOR. Closer LIBOR rate is to T-Bill rate, the more fluid the credit markets are. A corresponding rise in the TED Spread means interbank lending, and thus the credit markets, are tightening.
Earlier posts on international trade & shipping crisis:
Update on Shipping Slowdown
http://kingfish1935.blogspot.com/search?q=letters+of+credithttp://kingfish1935.blogspot.com/2008/10/update-on-trade-slowdown.html
http://kingfish1935.blogspot.com/2008/10/bloomberg-letters-of-credit-frozen.html
http://kingfish1935.blogspot.com/2008/10/more-news-about-grain-piling-up-in.html
http://kingfish1935.blogspot.com/2008/10/international-trade-shutting-down.html
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