The last time the Fed organized a global financial market reflation using dollar swaps on the scale it did this week was on September 20th 2008 just two days before the final collapse of Lehman Brothers when its Chapter 11 bankruptcy fell apart.
There is therefore a sense of deja-vu all over again about the Fed’s coordinated bailout of the eurozone on Wednesday. We just wonder who will go under on Friday?
Big fish
Market speculation yesterday was that the action came because a French bank was about to become insolvent. Yet we did not get this sort of move before Dexia or MF Global collapsed recently so the guessing must be that this is something bigger. Is this Greece about to finally default?.....read on
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