There is a real possibility that the TED Spread blowout is not an artifact of risk per se, but a symptom of the US dollar squeeze in Europe.
US Dollar Rally and Deflationary Imbalances Overseas
TED is an acronym for Treasury and EuroDollar. A Spread is just the difference or 'distance' between one thing and another.
Eurodollars are bank deposits denominated in U.S. dollars but held at locations outside of the U.S.
Initially, the term only referred to dollar deposits in London but has been expanded to include dollar deposits at any offshore location.
T bills are US Treasury debt of short duration are considered to be risk free.
TED Spread = Yield on Eurodollar deposits - Yield on T Bills
The TED Spread is the difference between U.S. Treasury bill yields and yields for Euro deposit contracts of the same maturity, generally three months.
Demystifying the TED Spread
“Depart from me, you accursed. For I was hungry and you gave me no food, thirsty and you gave me no drink, a stranger and you did not welcome me, naked and you did not clothe me, sick and in prison and you did not comfort me.' They answer, 'Lord, when was it that we saw you hungry or thirsty or a stranger or naked or sick or in prison, and did not care for you?' He answered, 'Truly I tell you, as you did not do it to one of the least of these, you did not do it for me.’”
Matthew 25:40-46