Attack of the Speculators

Bloomberg Businessweek reports on the $962 billion bailout (er, “loan package”) approved by the 16 nations that use the euro in an attempt to restore confidence in the common currency. Most of us ordinary people think that the euro is in trouble because of the incredible amounts of debt taken on by certain countries, especially Greece. Fortunately, we have reporters at Businessweek to set us straight:

Jolted into action by last week’s slide in the currency and soaring bond yields in Portugal and Spain, the 16 euro nations agreed to offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank will counter “severe tensions” in “certain” markets by purchasing government and private debt.

Silly us. It’s not the debt that’s the problem, it’s the “speculators” who are “attacking” the currency. It seems entirely more reasonable to me to conclude that investors are making rational decisions to hedge against a looming catastrophe.