And the markets bounce on speculation that action has got to be coming soon from somewhere

So far this is a bounce on speculation that somebody is going to do something. That wouldn’t be enough to move global stock markets except that after Friday’s plunge they were as oversold as they’ve been since last November. How high markets will bounce depends on whether or not we start to see something more concrete than speculation as the June 17 Greek election approaches.

Could the new EuroZone bailout fund directly recapitalize troubled Spanish banks? The European Commission says it should

What may be the goal of all the recent Spanish jockeying–a change in the rules that would let the permanent EuroZone bailout fund directly recapitalize banks–got a boost this morning from recommendations by the European Commission. Meanwhile a bad Italian bond auction took yields above 6% and yields on German two-year notes fell to 0%.