Credit Crisis: Signs of improvement

The TED spread is down to 2.56%...still well above historical norms but 200 bps down from the peak of a few days ago. Perhaps the credit crunch in financial markets is easing. But that is it.

The economy is falling...do not confuse the financial market bailout in the developed world as doing anything for main street. Consumers and corporations are under stress and crumbling. Look at widening spreads of corporate bonds and increasing delinquency ratios on mortgage and credit card debt in the United States.

Headlines will start to suggest a bottoming of problems. Do not bet on it. The market is not reflective of financial firms only...the broad economy is plummeting and there is further downside. India is not immune.

Use any pullback rally to reduce expsoure.