All the efforts of EU folks has certainly been filled with drama. Germany and France taking the lead which historically, politically, and financially has usually led to disaster in some form or another. But they slew the banker dragon by making him take a 50% hit, knowing that if the agreements fall apart, a starting point of 50% will easily become 80% . CDS fears have subsided but by the nature of the 50% deal sort of make that market unstable anyway. Why buy insurance if there is none?
Interventions can be a pump job, time out strategies in a political cycle. In the end the financial risks may be much greater than the political interests they are protecting. All these bail out measures are put on the spot and, as much as the Fed would not like to believe, there is an end game where no amount of cash held in reserve at banks can protect against the loss of confidence resulting in failed efforts. Economic expansion depends on the belief that there is a real upside, not just some sort of endless life support for bankers.
