Thursday, November 20, 2008

Frightening Picture of the Day

Frightening picture of the day. This is the corporate cost of borrowing in real terms, from Paul Krugman. Inflation expectations are taken from the difference between 20 year Treasury bonds and 20 year TIPs. You can really see the sharpening of the crisis. A key part of this is the decline in inflation expectations.

A related piece of information is that the spread between high yield bonds and Treasuries rose to 18.6% on Wednesday. The spread was only about 8% in August.

No comments: