Well look at that:
Trading on Wall Street settled into a pattern Monday afternoon after shares surged almost 5 percent at the open.
Major indexes were still 3 to 4 percent higher in afternoon trading, the increase coming after European leaders and major central banks announced an array of emergency lending measures aimed at easing the sovereign debt crisis.
“There is this collective sigh of relief,” said Alan Gayle, the senior investment strategist for RidgeWorth Capital Management. “There is a clear rally going on in the financials. A lot of the credit risk has been relieved.”
A nearly $1 trillion financial support package from the European Union and the International Monetary Fund came just ahead of a pledge by the European Central Bank to intervene in the bond markets.
For traders, it was a time to reset portfolios and absorb the new measures. Market strategists held conference calls with institutional investors, investment analysts lined up meetings, the financial sector rallied and market indexes jumped.
Wall Street loves a bailout! That way no one has to admit they screwed up, we can go back to business as usual with the casino still open and big bonuses for everyone and even enough piles of cash lying around to swarm DC with lobbyists to kill financial reform.
John’s day has finally come!
Um…yeah. I would think the reduced likelihood of major defaults from multiple European countries probably would make people feel better about things.
Give a fella’s pension a break..how about “Retirement might be possible again” instead of “big bonuses for everyone”.
You mean countries are going to use their tax dollars from the entirety of taxpayers to benefit a small subset of taxpayers that happen to be large, multi-national financial institutions? Buy me some stock in those institutions, ASAP!
The European Central Bank has already tried a bail out, but it was not big enough. Krugman says that in terms of bail out, the announcement just expands it, and it is probably still not big enough.
Big news is that ECB may start a more expansionary macroeconomic monetary policy, which may make a difference if it helps Greece, and maybe not Portugal, inflate themselves out of serious debt crisis (which is really not a debt crisis, but a debt crisis plus small country in an inflexible monetary union crisis). That new part is not a bail out of banks.
Many flavors of Keynesians have long believed ECB policy has kept interest rates too high, with inflation rates too low during recessions and financial crises, and Krugman’s analysis follows that long standing belief.
Also, too, ignore anything Tom Friedman or Robert Samuelson have to say about PIIGS and Euro crisis.
May 10, 2010, 9:28 am
Shock and Uh?
Krugman, NY Times blog
Edit: but, traders very well may be celebrating the bigger bail out component of the announcement, and becoming bullish based on general enthusiasm and animal spirits caused by ‘good news’.
J. Michael Neal
Well, the alternative is that Greece, Spain, Ireland and Portugal all just drop the keys in the mail slot and walk away from the country, giving it back to the banks.
Keerist on a crutch, this is what happens when you negotiate with terrorists.
@J. Michael Neal:
Let’s not bring down the outrage.
@mr. whipple: Hooray!
i read that as “For traders, it was a time to reset portfolios and absorb the new treasures.”
… which is actually more accurate.
Johnny Gentle (famous crooner)
WE EAT WHAT WE KILL!!
uh, especially if the government kills it first, de-bones it, sautees it, cuts it up into little bite-size pieces and serves it to us. Here comes the choo-choo!
1 trillion will buy quite a few dinner plates for these hard working capitalists to eat should they be unable to make any kills to dine on. But really, what are the chances of that? It’s not like they are unionized and lazy like those teachers!
@Johnny Gentle (famous crooner):
This. Also, too.
When I saw the title of the Reuters article up at Fidelity:
I knew we were screwed.
Meant to type
‘if it helps Greece, and maybe Portugal,’
‘if it helps Greece, and maybe not Portugal,’
In any case, Protugal’s problems are probably a due to speculative attack, or general trader and investor panic, not economic fundamentals.
A better target for outrage is not the actions of the ECB, which are slowly moving in the right direction (even if there is stinky bailout component).
Rather it is the lack of interest in or investigation into what role Goldman Sachs and other investment banks played in financial deals with Greek government and banks that did not reduce their risk, but may have increased it once global financial panic started.
The bailout for tiny-ass Greece was $300 mill larger than what the huge-ass United States required? Wisky Tango Foxtrot?
Well. You ignore random taxi drivers with suspiciously convenient globalization-friendly quotes at your peril, my friend.
I misread this as “shock and ewe”. I suppose there are a lot of sheep in Greece, and I guess they need a bailout as much as anybody.
@mr. whipple: Praise the FSM! A similar announcement about S&P and my joy will be complete!
The Moar You Know
@Punchy: In all fairness, they deserve it more. They invented baklava and ouzo. We didn’t.
Good news for my hometown. The tax coffers get filled, less cuts for schools and city services. Yee-haw.
Go Yankees. Fuck all teams from Pittsburgh.
@eastriver: stinkin jankees
My understanding that the ECB announcement of expanded bail out and more expansionary monetary policy is aimed not just at Greece, but Portugal and Spain as well.
Financial markets in Portugal following those in Greece closely, with lag of several weeks, in signaling sovereign debt crisis. Worry is that panic may spread to Spain next.
Correct me if I am wrong, but that is my understanding.
In edit: maybe everyone should make sure to go to their local Greek Spring (Orthodox Easter) food festival, to at least show moral support.
Much better headline:
The Euro saves the Gyro!
OT: Hannity thinks Iraq should reimburse us for the cost of the war we brought them.
This further verifies my theory that the best way to certain wealth is to start a new country and lead it to bankruptcy.
I get dibs on the presidency but I’m still accepting applications for the minister of finance.
ot but related to yesterday’s conversation.
Scott Horton has up an excellent discussion of Holder’s Miranda proposal.
Horton supports it.
@The Moar You Know:
We invented jazz, nukes, and planned obsolescence.
The Mouse That Jingled?
OT-but it’s about Europe. Brown is out as Labor leader and now Clegg is looking to make a deal with Labor after getting nowhere with the Tories. This has some guy named Alex Massie’s knickers in a twist:
If I were Clegg, the only thing I’d fucking care about would be electoral reform. If I won 23% of the vote and got 8% of the seats, I’d be a fool to care about anything else.
What’s even better, Wall St rolls in the money even as conservative talk radio hosts (Charles Payne and his ilk) rail against the European bailout (it’s sosh i alist), the European Union, the euro, the Obama Administration — everyone except the banks, hedge funds and other financial markets, who should be left alone to do whatever they want to do free, of any govermental interference.
Except for the money.
I caught a little of the CNN business reporters talking about this. They were referring to “TARP 2”, which confused me because it sounded like this was the US government bailing out Greece. You don’t suppose that was intended, do you?
Let me get this right: a limited definition of Miranda announcements, for public safety rights, but accompanied by complete audio recording of interrogations?
You left the GOP right? Because this post ignorant tea bagger nuttiness at it’s best.
The markets reacted favorably because today’s actions greatly decrease the chance of a bunch of well-run EU countries (Spain Portugal) not going belly up.
Re PA Senate race: Sestak win is assured!
Europe wants to spend a trillion dollar on this rescue package. Where is all this money coming from? A combination of debt and printed money! It seems that the short-term perspective, once again, is more important than the long term. I am very doubtful about the future of the eurozone in its current form.
Governments have become slaves of the market and of speculators who would love to see whole economies collapse because that’s where they have put their bets.
Edit: A part of me realized the necessity of these measures, but by now, I am reacting allergic to things like “reassuring the markets”, “erasing risk”, etc…
It’s a demonstration of Irrational Exuberance at its finest, and “some say” that it ain’t gonna be enough to ward off the inevitable -default-restructuring of debt.
The Moar You Know
@cleek: Another wonderful idea bought to us by someone with no sense of history. He ought to read about the hilarious consequences of the Treaty of Versailles.
The cynic in me likes the perfect convergence of evil:
BP+Halliburton = explosion
Yes, because Horton is correct in all the particulars: The US must become more like Thatcher’s Britain.
I thought they finally buried her, and now our security apparatus wants to dig her up and ask her how to make Times Square safe. Fills my heart with blood.
From your link, it is highly entertaining to watch the Brits’ version of a knock-down-drag-out fight.
@Poopyman: It ain’t over until Bill Kristol declares that Specter clearly has the race won.
@Johnny Gentle (famous crooner): I stopped reading at your comment. You clearly won the thread!
@The Moar You Know:
They also get paid for 13-month years. Why didn’t WE think of that?
@The Moar You Know:
Yeah, but at least Germany was one of the ones doing the attacking. Iraq didn’t do shit. Not that your point is wrong, by any means. I’m just sayin’.
But let’s see. Clegg underperformed whatever expectations he built up in the first debates, and the LibDems only won 57 seats, a net loss of 5. The Conservatives won 306 seats and Labour won 258 seats. I’m not seeing a strong mandate for electoral reform LibDem style.
It will be interesting to see how this all turns out, especially if Labour manages to work a coalition that leaves them in power without Brown as prime minister. But even here, they may end up owing as much to the Scottish Nationalist Party as to the LibDems.
The Thatcher era-reforms to interrogation were actually liberal in effect. British interrogations had gotten out-of-control and brutal, especially in Northern Ireland. The reforms- which included mandatory audio recording of interrogations, largely to protect the prisoner- brought considerable improvement.
@Johnny Gentle (famous crooner):
Can we get a Balloon Juice banner quote and/or category tag for that?
In fairness, this time, they’re not bailing out banks, or banks threatening to take down economies, they’re actually literally bailing out economies.
In this case, Main Street is being bailed out, except it’s Greece, so it’s really Kentriko Dromo
Isn’t this similar to what Obama himself did in Illinois in getting videotaping done of all confessions?
Just Some Fuckhead
Or, the free market loves government intervention.
Johnny Gentle wins the day.
excellent news for John McCampaign. He helped! no shit
Time for another “John Rogers is a genius” posts:
The most astounding number from the poll? 28% of Republicans said the recent oil spill in the Gulf of Mexico made them more likely to support drilling off the coast
I actually think he is using Labour to get a better deal from the Tories. When the Tories found out he was meeting with Brown and the gang, they immediately began offering a full coalition deal, a referendum on electoral reform (though not proportional representation, Clegg’s favorite idea) and possibly even cabinet seats for Clegg and Cable, where just yesterday they were demanding guaranteed LD support on a couple of bills, but not a full and proper coalition.
Now that Brown’s said he will be a strictly transitional figure– out by September at the latest– LD is kicking the tires of a progressive coalition. They’d definitely get a couple of cabinet seats in that situation.
They have the advantage of numbers if they go with the Tories. They get to keep most of their principles if they go with Labour and the nationalists. But there’s the issue of who replaces Brown. It’s like political blind dating.
Also, too, there was also the worry that Scotland would make even more moves towards independence under a Tory minority government. I don’t know how serious of a risk the dissolution of the Union is at this point, but some Liberal Democrat peers were fussing about it this morning. And the Scots DESPISE the Tories.
Any news yet on whether or not Goldman Sachs actually lost money, even on the big B/M day? They apparently did not have a single losing trading day in the entire first quarter.
Oh, also, I’m google bombing my landlord. So… Fan Apartments. That is all.
@Amok92: Yes, and only 17% of the spillers support Palin.
Possibly, but it didn’t involve changes to the implementation of Miranda when he did it either.
And hearing ‘Thatcher’s reforms were more liberal than the essential way Amadou Diallo was treated’ isn’t a ringing endorsement for wrb’s position.
@The Moar You Know: Treaty of V:
I have often thought that WWII was caused by France, even if Germany actually fired the first shot.
@jenniebee: You might consider getting a lawyer to help you deal with these people. Just a thought.
Miranda has been changed. Is it likely that the interpretation of the public safety exception made by the AG in a terrorist situation will not be deferred to? Obligations under Miranda in such situations are entirely amorphous now.
I see going to congress to get the public safety exception clarified a rehabilitation of Miranda.
Island in Alabama
Congratulations, Euro tax payer – you’ve been TARPed!
Now go sit down
Really fun video:
NPR’s Storycorp is a project which records individuals interviewing people they know. Storycorp recently posted a sweet and genuine animation to accompany the radio story of a boy with Asberger’s interviewing his mother.
The video is here, enjoy.