Talk about inflation. Have you seen the price of bailouts lately? It
wasn't that long ago that €100 billion, or $125B, would buy you a month
or two of goodwill. Nowadays, a bank-bolstering plan of this size can
hold the attackers at bay for only a matter of hours.
As historic and unexpectedly large as this weekend's rescue effort was,
it has done nothing to stem the ascent of Spanish bond yields, as well
as those of neighboring countries like Portugal and Italy. The euro has
given back more than half its initial gains, and benchmark stock indexes
across the continent—and in the U.S.—are all off their early highs. To
call the reaction underwhelming would not be an overstatement.
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