We have been writing for days now that the bailout of Greece’s debt crisis was likely to mirror TARP.
What we meant by that was that the promise of the bailout would come first, with the details to be worked out later.
And that’s exactly what has happened. We now have a vague promise of a commitment that Europe will stand behind Greece. The details, however, won’t be worked out for several days. We wouldn’t be surprised if it takes even longer than that.
The Troubled Asset Relief Program went from being a blanket grant to the Treasury Department to do anything it takes, to being a plan to buy toxic mortgage assets (with a possibility, insisted upon by Republican House members, of putting asset insurance in place instead), to being a capital injection program. Later, it spun off all sorts of weird children with various names: TGLIF, TALF, etc.
So you shouldn’t expect that we’ll get anything final on the shape of the Greek bailout on Monday. This thing is likely to shift, especially if the “next dominos” start to tumble. This isn’t the end of the crisis or the bailout. It is the beginning.