Any economist would look at the news coming out of the EU this morning with a healthy dose of skepticism: by granting Greece a reprieve, they reduce their incentive to "fix" their fiscal mess; and by granting banks a reprieve, they increase the incentive to take on further risk. Zerohedge explains:
the European joke has come full circle. Indebted nations borrow more money to bail out other indebted nations who ask insolvent banks to cut a 50% off deal on the loans that were given to them, but the insolvent banks will then have to raise capital which the will of course borrow from the over-indebted nations whom they just gave money to. Get it? Problem solved - BTMFD!!!.