This week there have been some signs that the credit crunch might be easing.  One indicator of credit risk, the TED Spread, is below 1% for the first time since August.  The TED Spread is the difference between the rates on inter-bank loans, or LIBOR--London Interbank Offer Rate--and the rate on Treasury Bills.  NPR's David Kestenbaum has a report on the falling TED Spread, and why a lower TED Spread usually means more borrowing, which could mean good things for businesses and workers.  And you can track the TED Spread on this great interactive chart from Bloomberg.

The Stanford economists over at Vox found positive signs for the economy in looking at measures of uncertainty.  Nicholas Bloom and Max Floetotto say uncertainty is falling, and that while three months ago they expected a dire recession, they now believe we may have dodged the bullet.  One measure of uncertainty is the so-called financial "Fear Factor," or the volatility of the S&P 100.  Their analysis shows Fear Factor has dropped precipitously over the last three weeks. 

This is a sign of positive potential, not that all is well.  Bloom and Floetotto argue that this is in large part due to policies that did not overstep their bounds, but they also say that it is important to take further action now:

Many economists make the case for a stronger policy response. That might be right, but policy makers need to act fast. Any additional economic stimulus – be it a spending package, quantitative easing or a couple of rounds of liquidity injections – has to be enacted quickly. Dithering over different courses of policy will actually make things worse by adding uncertainty (seeCaballero 2008). This is exactly what happened after 9/11 when the Federal Reserve Board criticized Congress for creating unnecessary uncertainty with its lengthy debates on investment tax credits.

Delaying the stimulus package until the summer may mean that it is too late. The economic medicine will be administered just as the patient is trying to leave the hospital!

You can read their full analysis here.