Despite the uncertainties related to the Greek elections, the MSCI Asia-Pacific index closed the week with a gain of 2%, the highest since January. The optimism has no specific reason, other than a sense that things were so bad that policy makers around the world are setting up stimulus measures and safety nets. The governor of the Bank of England, Mervyn King, has also announced a plan to ease bank lending, while in Germany opposition to the 'European regulator' for banks is easing, and even the plan of the German 'wise men' to mutualise the debt of the euro countries exceeding 60% of GDP seems to find openings for a hearing in Bonn.
However, tensions remain, apart from the obvious ones related to Greece, Spain and the possible contagion for Italy. Cyprus, another euro country, will have to resort to an aid program, even if the amounts are crumbs compared to what we have been used to. However, to keep tensions high, a former Soros adviser, Takeshi Fujimaki, has prophesied that by 2017 the Japanese state will have to declare default. Congratulations.
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