The extraordinary announcement yesterday from Euro zone leaders seems to have convinced most world markets that this is enough for now to put their Euro fears at rest. As I type this, the French market is up almost 9% today.
What I still don't fully understand is the extent to which the European commitment really covers all of the European countries at risk (except the UK), and it is in that understanding that I think we will see the full reaction of markets.
The leaders - France and Germany, primarily - who steopped out ahead on this one may very well have gotten ahead of the people they lead and this could cause big problems very shortly as the price tag for yesterday's news becomes better understood......while people in the south of Europe (starting with Greece) also come to appreciate more fully the cutbacks that will affect them individually.
There are many tails to all of this......and lots of ways in which they could start wagging in a destructive direction.
There is much basis for continued concern about how all of this will work out. Roger COHEN discusses some of this here, and I believe we risk a great deal in our search for a quick fix and our ritualistic desire to declare victory and go home right away.
This just looks too good to be true, but I will be delighted to wind up being proven wrong!
In the end, it is a volatile mix of finances/economics and fear/psychology.
Here are two more pieces that help focus one's thinking on Germany and on Greece. Neither one is especially encouraging.
Finally, this is an excellent summary of where things stand at the end of the (US) East Coast's financial day.
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