New Crisis: We Broke The Credit Markets

"The real solution to the puzzle, however, is even grimmer. What's happened is that government rescues broke the credit markets, making them an unreliable indicator of financial health and economic strength. By offering banks the ability to issue government guaranteed debt and promising to support banks by almost any means necessary, we may have broken the ability of the TED Spread to be a reliable indicator of anything broader in the markets. In short, the TED Spread has stopped measuring financial health; it's simply priced off of guarantees."