As we observed earlier, today’s stunning market surge reminded us of the day back in October 2008, when news first broke that Hank Paulson was mulling a program that we’d come to learn would be called TARP.
We had a brief surge before ultimately plunging soon thereafter.
The bottom line is that like the initial TARP — which bore no resemblance to the later TARP — nobody has any idea how a Greek bailout is going to work.
What we do know is that any effort by Central Europe to stem the crisis in periphary Europe is going to be fraught with complications, risk, moral hazard, and confusion.
Who else will be bailed out? How does union credibly maintain fiscal discipline?
Those are a couple of issues that scratch the surfaced.
While markets are feeling good right now, nervousness could come back violently in an instant as a plan fails to go smoothly.