Financial Market Stress: Inching Back Toward Normal

Financial markets are not nearly as skittish as they were last autumn, but they are still a good bit worse than normal in terms of risk spreads.  In simple terms: risk is priced 4x normal, but that's down from 16x normal back when Paulson and Geithner were trying scare the bejesus out of the public.

In each of the following charts, high risk debt is compared to low risk debt of similar maturity.

Ted Spread