The signs of euphoria in the credit markets are plentiful:

- Libor below <1%

- subdued Vix

- negative basis continues to narrow

- credit curves are steeepening

- the TED spread remains at pre-Lehman levels

- BBB rated bonds are outperforming A rated bonds

- investors have largely shrugged off the news that 10 of 19 banks will need capital and that S&P placed many of these banks on negative watch

- another bank is issuing non FDIC guaranteed debt (BoNY/Mellon)

- investors are finally starting to participate in the TALF program

- Fiat, Opel and Chrysler are being called a "supergroup"?  perhaps to mechanics worldwide...

- the US sovereign CDS spread has narrowed to where it's close to Campbell Soup CDS spreads (low ~30bps)

On the day however, spreads are mixed to slightly wider.  Given the recent rally and euphoria noted above, I wouldn't be surprised if we languish or weaken as equities "catch up" to us.

The widest sectors are currently insurance, financials and REITs.  

The tightest sectors are healthcare/pharma, telecom and industrials.

James Surowiecki has an interesting article in the New Yorker debating how big the financial sector should be as a share of US GDP (given that it shrunk in 2008 for first time in 16 years).  

This blog has a great post about pending problems in the municipal market.