You've heard the phrase too good to be true; today is beginning to seem like a day with too much that is too good to be true. Today we have had headlines that durable goods are (mostly) up, new home sales are up, the Eurozone is going to allow Greek bondholders to have-at least- a 50 percent haircut and Berlusconi in getting a deal with the opposition may have offered his own resignation in the bargain. And yesterday it emerged that the consensus among economists is now 2.5 percent GDP growth-much higher than what was assumed just a short time ago.
Going in today's Euro Zone meeting it was assumed they wouldn't have a deal today. However it has now been announced that EU leaders intend to quadruple the EFSF to about 1.0 trillion euros:
"The sources said the 440 billion euros ($611.4 billion) fund, set up last year, would have about 250-275 billion euros available after amounts are set aside for aid to Greece, Ireland and Portugal and for the recapitalizing the region's banks."
"The ratio of the leverage will be of at least 4 times," one source said, while another said the spare capacity available to be leveraged was 250 billion to 275 billion.
"The exact amount of capital available will only be known once negotiations over a second bailout package for Greece are agreed. Part of the problem is agreeing on credit enhancements for the private sector. More credit enhancement will reduce the amount of funds in the EFSF for leveraging."
Turns out Republican Operation Tank the economy is tanking.
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