Kai Ryssdal talks with Sudeep Reddy from the Wall Street Journal and Cardiff Garcia from the blog FT Alphaville about the latest eurozone deal, the subsequent market rally.
On the eurozone deal:
Cardiff Garcia: The problem is, there’s just a staggering number of unanswered questions here. And so yeah, markets rallied on it, but so what? Markets can be really silly sometimes. What we don’t know, for instance: how are bondholders with Greek debt going to be forced to take this haircut? Are banks going to be able to raise the capital they were asked to raise? Which shape is this bailout facility actually going to eventually take? And that’s before even getting into bigger issues of European fiscal integration and the role of the European Central Bank, things like that.
Sudeep Reddy: I’ll just go out on a limb and say maybe January 24th is when we’ll have our next big crisis? We’ll just put it at that point…That’s just three months from now, and we seem to keep going through this same problem of they’ve become very good at kicking the can down the road — almost all politicians have around the world. And all the hard problems have been defered, to be discussed later. This market rally will fade and we’ll come to the point where everyone realizes that they just didn’t get very much out of this summit.
For more analysis, listen to the story at the top of the page.