The European leaders plan to blow away the Euro sceptics has been an outstanding “success” . The $971 billion plan by the EU,ECB and assorted central banks in the form of emergency lending,loan guarantees and swap lines has led to a massive short squeeze . European indices are melting up by more than 5%. The weekend bailout expectations have worked out with the shorters squeezed out . The message was unequivocal,when in trouble we will drown you with currency.Even the friendly Fed which has bee quantitative easing the problems across the Atlantic away came in with a helping had.The\u00a0 Fed will “provide the European banks” with dollars as needed.The Fed would be providing dollars to the Greek banks in lieu of the junk Greek bonds. Playing the markets both on the long\/short side has become fraught with massive govt intervention hazards. Print money and everyone will be happy is the mantra for the world governments. If printing money was the answer to our problems then why work at all.<\/p>\n
European shares surged on Monday behind outsize gains for financials, after European finance ministers and central bankers agreed a program designed to stop a crisis that started in Greece spreading through the rest of the region.<\/p>\n
After tumbling 8.7% last week, the Stoxx Europe 600 index\u00a0 \t\t\t\t\t jumped close to 6% to 250.9, led by financials. That’s the biggest one-day gain in point terms since Dec. 8 2008.Gainers included some of the region’s largest banks: BNP Paribas\u00a0 \t\t\t\t\t climbed 17.2%, Credit Agricole\u00a0 \t\t\t\t\t soared 20% and Barclays \t\t\t\t\tjumped 14.8%.These lenders were taking back some steep losses made in recent weeks as investors fretted that first Greece then other peripheral countries would default on their debt.<\/p>\n
“Whichever way one cuts it, a sovereign bond is the safest asset on a bank’s balance sheet — doubting its value, has a knock-on effect on all other assets. This stands at the center of recent risk aversion,” said bank-sector analysts at Goldman Sachs. To combat worries, European finance ministers and central bankers agreed late Sunday on a new loan program that could top 750 billion euros ($970 billion).As well as the loan, the European Central Bank confirmed late Sunday that it will buy bonds in the secondary market to ensure liquidity for “dysfunctional” market segments.<\/p>\n
The U.S. Federal Reserve is also going to reopen a program set up during the financial crisis to make sure foreign banks have the dollars they need.<\/p>\n
Of regional benchmarks, the U.K. FTSE 100 \t\t\t\t\tjumped 4.5% to 5,353.38, the German DAX index \t\t\t\t\tclimbed 5.4% to 5,972.12 and the French CAC-40 index\u00a0 \t\t\t\t\t surged 7.9% to 3,660.46.<\/p>\n
Asian shares jumped and U.S. stock futures were also pointing to large gains on Wall Street, with Dow Jones Industrial Average futures up 359 points. The euro \t\t\t\t\tclimbed against the dollar, moving up 2.4% to $1.3059 and copper and light sweet crude oil futures were also advancing. The British pound\u00a0 \t\t\t\t\t also rose, though gains were more limited than for the euro as negotiations continued on forming a government. Sterling rose 1.3% to $1.4960.