The big news out of Europe is that the European Central Bank is going to bail out Spain and Italy, buying their bonds that investors around the world have been dumping. The smart money doesn't want to go near that sort of stuff. Bloomberg points out that this could lead to accusations that the ECB is bailing out profligate nations, in clear breach of the Euro zone's founding treaty.
The big question is will it help? The market isn't exactly confident it will work. The reality is that it might be a positive in the short term but in the mid term, it doesn't really solve the problem. They will need something else. This is not a howitzer. It's not a promise to buy unlimited amounts of sovereign debt. It won't be enough. And that might be a disaster for the global economy.
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