This bailout is a Ponzi scheme and the people will foot the bill:
– Here Is Who Just Got Their A$$ Saved By The Huge Euro Bailout (Business Insider)
– Federal Reserve Opens Line Of Credit To Europe (AP)
– Stephen Pope of Cantor Fitzgerald on ECB buying government bonds: ‘This is total, undiluted quantitative easing.’ (Forbes)
– ECB Resorts to ‘Nuclear Option,’ Intervenes in Bond Market to Fight Euro Crisis (Bloomberg)
The Deutsche Bundesbank. (Bloomberg)
May 11 (Bloomberg) — Germany and France are among top- rated euro-area states that may compromise their AAA grades by standing behind the debts of weaker members with their 750 billion-euro ($955 billion) stabilization fund.
The package is “making debt profiles deteriorate, potentially damaging the ratings of core sovereigns,” said Stefan Kolek, a strategist at UniCredit SpA in Munich. “It’s a kind of Ponzi game at the highest level.”
The unprecedented loan package was designed by the European Union and the International Monetary Fund to halt a sovereign- debt crisis that threatened to push Greece, Portugal and Spain into default and shatter confidence in the euro. As part of the support plan, Germany’s Bundesbank, the Bank of France and the Bank of Italy started buying government bonds yesterday.
Bonds of Portugal, Spain and other deficit-plagued nations on Europe’s periphery soared yesterday and bunds — the safe haven for holders of European government bonds — weakened as the threat of a Greek default receded. The cost of insuring against sovereign losses using credit-default swaps tumbled yesterday, with contracts on Greece sliding 370 basis points, their biggest one-day decline, to 577, according to CMA DataVision.