Monday, March 28, 2011

The STLFSI

One doesn't hear much about the STLFSI (St. Louis Fed's Financial Stress Index) with regard to measuring stress in the financial system.

Here is a document (pdf) that explains the construction of this index.

My thoughts on this index are varied and complex.  For now, I am simply posting it as a reference, as I find it interesting.  One might note that at present levels of .155, the reading of the STLFSI is very close to the levels that immediately preceded the two recessionary periods indicated in gray.

This chart was last updated on March 24, incorporating data from 12-31-93 to 3-18-11 on a weekly basis:



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The Special Note summarizes my overall thoughts about our economic situation 

SPX at 1319.05 as this post is written

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