While I’m still liking Paul’s metaphor, where in he points out that some firms are like the springs in the mattress the entire economy lies upon, Felix Salmon plays with a nice alternative, the weather.

Most of the companies listed on the stock market aren’t, and they should be able to weather a financial storm with relative ease.

On the other hand, that financial storm really does seem to be more of a heavy breeze than a major hurricane. The Standard & Poor’s financial-stock index is down by only 3.5 percent this morning-hardly a bloodbath. And the TED spread-a measure of distrustfulness among banks-is up sharply at 192 basis points, but is still below the levels we saw in the summer of 2007, and again in December, and again in March. Indeed, each spike upward in the TED spread seems to be lower than the last, which has to be a positive sign.

The big unanswerable question, though, is what happens next. Hurricanes start out as a heavy breeze, and then get worse-and the preconditions for a financial hurricane are very much in place. If a real hurricane needs high ocean surface temperatures and warm humid air, a financial hurricane needs generalized nervousness and a general lack of liquidity. Once those are in place, a few failed trades are all that is necessary to precipitate a very nasty chain reaction.

Unlike the weather we lack nice high resolution photos from space to show us what’s just over the horizon, all we have is pictures of what happened yesterday.  We can look at the temperature, check which ways the gusts are blowing, tap on the barometer.  He draws our attention to one of these simple instruments.

“How big is settlement risk right now? An indicator one might look at is the number of “fails to deliver” and “fails to receive” reported by primary dealers in U.S. Treasury bonds.”

That’s 20 year’s of data.  Squeek’s from the springs in Paul’s mattress.  That first peek is just after 9/11.  The last burst is so far this year; but the data ends on the 3rd of September.