Beat the Bell

In case you missed it. The Euro area governments finally got a round to announcing a plan that sounded like they are at least trying. Euro governments and the federal reserve will be providing approximately one trillion dollars in loans to Euro countries that need it. The real shocker is that the ECB will be buying debt to make sure that the solvent EU governments can borrow as much as necessary. This will hopefully lead to some monetary expansion as well. The final kicker is that the Federal reserve is reopening it’s foreign currency swap line from the depths of the recent financial disaster. So, France and Germany can borrow Euros from the ECB, loan them to Greece and whomever else needs them, and then those countries can swap them to dollars at the fed.

Sounds like a plan. I think that Greece is solidly ringfenced, and has also been bought some time, but without some other manner of non repayable cash transfer, debt restructuring, or internal devaluation the problem has just been postponed. Portugal and Spain are safe. The Euro is safe. Greece might still slip under the waves at some future date.

In another note, the big dome didn’t work to stop the oil leak. So we’ve got another 6 weeks or so to go until the relief well is finished. The slick is moving west now. Big mess.