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Credit Markets are healing and opening up for business. Credit Research indices of credit spreads are improving across the board

CDR counterparty risk spreads

US High Yield

US Investment Grade - CDR Liquid 50 NAIG Index

CDR Liquid 50 Asia IndexCDR Liquid 50 EU-IG Index

Global

CDR government risk spreads

Bond issuance of IG and HY is also going strong. Libor is down a lot.
Could the market be engaging in wishful thinking and be ready for another blow out of spreads?Sure but this healing creates a self-fufilling propechy(What George Soros calls 'reflexivity'), the improvement in risk taking increases the amount of credit avaliable to economic agents which raises the chances they will make it without going through bankruptcy, it also lowers their cost of credit increasing their profitability which also raises their odds of survival. As Bill Ackman put it if everybody was a pessimist like Roubini the economy would die of a horrible death. If instead everyone just turned into a Pollyana the economy would perform much better than otherwise, thats why badly designed stimulus packages are not such a bad idea, quasi placebos can be a powerful thing