Jim Pethokoukis sums up today’s Fed action on the eurozone:
Euro zone governments now have a bit more time to figure out how to save the euro zone. Markets are happy because it seems the ball is moving forward. But without deep structural reforms in at-risk economies, the ECB probably won’t act. As Paul Ashworth, U.S. economist at Capital Economics, puts it, “This is a very helpful move. The markets clearly love it and liquidity is half the battle. But there is still a broader question to be resolved about solvency. If Italy defaults on its debt tomorrow, it wouldn’t matter how much liquidity you had.”
The can-kicking has become almost ballet-like in its sophistication. But it’s still can-kicking.