Years ago in the Army, I can remember straddling my bunk, methodically taking apart my M-14 rifle and then re-assembling it . . . blind-folded . . . with a buddy counting off the seconds.  It was not unlike watching the Europeans wrestle with their financial crisis.  They are trying to fend off the bond vigilantes by assembling a bazooka, with no idea how to do it and with the clock ticking.

First, they prayed austerity programs in the PIIGS would be enough, but they were not.  Then, they prayed that the ECB would act more like the Fed, but they refused.  Next, they established the European Financial Stability Board (EFSF), which was not big enough.  So, they tried to increase it by leverage, but the Austrian economists torpedoed that plan.  Now, the ECB president has said they will backstop the individual banks that conduct quantitative easing in behalf of the ECB.  Lastly, they are developing a plan to increase the lending capacity of the IMF, which would act as an additional EFSF.

I have to give them credit.  They remained in denial for a long time but are now fully engaged.  If they can assemble the EFSF, with the IMF, QE and austerity . . . they may yet build a bazooka!