June 15, 2012 (Chinavestor) Chinese indexes surged on Friday in Asia ahead of the critical Greek vote over the weekend. It looks as if central banks could make up for a freeze should a Greek disorderly exit from the Euro zone take place.
But I'm less optimistic should Greece decide to leave the common currency. Borrowing costs have sharply risen for Italy and Spain according to the following chart. These are countries that are too big to save. A common euro bond, guaranteed by Germany and France along the rest of the members, should help lower borrowing costs for larger members. But it looks to me that Germany, and Angela Merkel in particular, doesn't have the political capital to pull it off. That's a shame.
Source: Thaler's Corner