"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Sunday, May 2, 2010

Europe follows in the footsteps of Bernanke, Geithner and Hank Paulson and Bails out Greece

The European leadership has taken a page from the Ben Bernanke, Geithner and Hank Paulson playbook on bailouts. Moral hazard has officially gone global let alone the debt burden placed on grandchildrens' shoulders around the planet!! 

Wall Street Journal
An unprecedented €110 billion ($146.45 billion) aid package for debt-laden Greece should give the euro a boost this week, but any relief rally is likely to be short-lived amid concerns that other fiscally strapped euro-zone members will also need support.

The positive news from the euro zone could also be overshadowed by measures announced by China to tighten bank-lending standards to prevent its economy from overheating. That could weigh on growth-sensitive currencies, such as the Australian and Canadian dollars, which have benefited from the strength of the Chinese economy. Investors could also be rattled by the discovery of a car bomb in Manhattan's Times Square on Saturday and head for the safety of the greenback and U.S. government debt.

Still, when New York traders arrive at their desks Monday—many markets, including the U.K., are closed Monday—their focus is likely to be on the aid agreement announced Sunday by the euro zone, the International Monetary Fund and Greece. The plan requires the euro zone to put up €80 billion and the IMF €30 billion. National parliaments are expected to sign off on the deal swiftly and euro-zone leaders will validate it Friday, allowing Greece to access the funds before a mid-May debt payment of €8.5 billion is due. In return for the aid, Greece must implement tough measures to cut its budget deficit.
Link to complete article
Likely Response by quant fund algorithmic gamers
trading the equity futures overnight 

Actual response in Greece

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