Politicians and other policymakers are on panic mode. This is evident by the report that Mr. Geithner will meet his counterparts in Europe next week, as a U.S. Treasury statement said, “to discuss the economic situation in the region and the measures being taken to restore global confidence and financial stability and to promote global recovery." Simply going by recent (i.e. post-2008) historical experience, it is highly unlikely they will be successful at all in trying to achieve their end.
European leaders have proudly claimed in the past that this crisis was American made and it would have no impact to their economy. We have seen this is clearly false. They are the same leaders today saying that the weak European states bailout is sufficient to restore prosperity. Unfortunately it will not work.
In the very short term, expect the market to gyrate based on the last thread of hope maintained by “investors.” Nevertheless, the writing to this market is on the wall…."it’s been weighted and found wanting.”