The "Euro TARP" announced after an all-nighter on Sunday right before the asian markets opened (<sarcasm on> like all carefully thought out plans <sarcasm off>) is a 700 Billion Euro (about 1,000 Billion Dollars) package of loans and loan guarantees for Greece. The 2008 US TARP was for the same nominal 700 Billion amount (in dollars). How did the US come up with 700 Billion? "It's not based on any particular data point . . . We just wanted to choose a really large number." No Kidding. If this package is a good bailout, why didn't they do it last week, last month, last year, 10 years ago and why don't they do another trillion tomorrow and the day after that? By the way, it's a preview of the coming US bailout of California. All the European nations and the IMF (mainly the US) are going to contribute. Does it make sense for Spain to borrow money at 8% to loan to Greece at 5%? Why is the solution to debt always more debt? None of this will solve anything because the Greek citizens will not adopt austerity measures or pay their taxes and none of the money is "stimulus".
I feel exactly the way I did after the TARP bailout in 2008. "Is that all you got?" A Trillion dollars of debt thrown into hole and all they get is a modest pop in the Euro and 400 point pop in the DOW pre-market. The DOW usually goes up on Monday's when the 401k purchases come through and most of the increase in the DOW since March have been pre-market.
The Europeans are trying to hurt the speculators, but they can't. If they cushion market volatility to clam the markets, that makes options cheaper and carry trades more attractive. If they increase volatility to shake out short sellers, it will spook the markets. No matter what they do, Goldman Sachs will figure out a way to rape them. Goldman just announced that they made money EVERY TRADING DAY LAST QUARTER and make over $100 million on half of the days.
Despite all this Moody's just put Greece, Ireland and Portugal on negative ratings watch.
By the way, after the money is used to bailout the politically connected, Greece will default anyway.