Dan Muller's Thoughts

Credit markets are improving says the Federal Reserve Vice Chairman.  Spreads on high-grade corporate bonds have fallen, prices of equity rallied, and there has been no trouble for firms to raise funds in credit markets.  These constructive signs are because of the Fed’s financial institutions ability to raise capital, labor to boost liquidity, and economic data that is optimistic.

These are not optimal credit conditions despite some positive signs.  Skeptical investors still feel the same about credit quality and mortgages security market has fallen dramatically.  And because of the deteriorating market for securitized loans, loans and other assets cannot be sold or bundled by banks.  Default risk has been increasing as credit conditions worsen, leverage has had to be added to the balance sheets of financial institutions.

Great video that helped me understand America’s Crisis

Part 1:

Part 2: