It is fairly easy to pinpoint the day when the global financial hurricane hit a complacent world. Western credit markets froze on 9 August, almost exactly two years ago.
It will be far more difficult to pinpoint the day the crisis was finally over. But Monday would be a good candidate, if one goes by two very popular measures of how traders price risk: the TED spread and the Libor-OIS spread.
Technicalities aside, both measures drifted down to levels not seen since early 2008. Bloomberg reported that the TED spread was at 29.4 basis points compared with a peak of 464 basis points when Lehman Brothers went belly up in September 2008.
The Libor-OIS spread, which was a favourite data point of former US Federal Reserve chairman Alan Greenspan, was down to 28 basis points. A level below 25 denotes normal markets, Greenspan had said in June 2008.
But the economic effects of the financial crisis are still being felt in terms of job losses and lost output. That is now the big challenge.