Bloomberg Financial Condition Index (BICIUS) measures a basket of equity and credit measures to gauge the state of the
U.S. financial system. For example on
January 1, 2013 the Financial Conditions Monitor closed above 1 for the first
time since late February 2007. This indicates that the financial system is 1
standard deviation above normal.
February 2007 marked the beginning of the sub-prime crisis as the first
lenders were forced into bankruptcy and the SPX index suffered its first -2%
single day decline in four years on February 27th, signaling the
beginning of the turbulence that was to accelerate for the next two years. This
is a significant milestone that completes the four year recovery process from
the depths of the crisis when this index reached a remarkable negative reading
of -12.6% Standard Deviation in October 2008.