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Despite the reassuring bond sale on Thursday, investors could quickly drive up Greece's borrowing costs if they come to believe an I.M.F.
With the deficit at about 13 percent of gross national product, he's seen as credible on fiscal responsibility, the key to reassuring bond and currency markets.
"Not only does the Fed point out that inflation is heading lower, thereby reassuring bond investors," Mr. Vitner said, "but they also hint that the economy is bottoming out, which should give stocks a boost".
The big ratings houses kept their investment-grade ratings on Enron and Lehman Brothers practically until the end as well, essentially reassuring bond investors their money was safe.
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Europe's answer has been austerity: savage spending cuts in an attempt to reassure bond markets.
His task then was to fashion a deficit-reduction plan of tax increases and spending cuts to reassure bond markets of Britain's creditworthiness.
Soothing niceties from Cheshire-cat politicians no longer reassure bond markets Scotland would pay a premium for being part of a monetary union that could break.
Insolvency needn't be a concern; if the government really felt the need to reassure bond markets, the best thing it could do would be to reduce the long-run path of spending on health care.
On Thursday, European leaders meeting in Belgium announced they had agreed to a political statement to try to reassure bond markets and head off the crisis, and said that finance ministers would work through the details next week.
Germany has been stubbornly resisting pleas by the Greek prime minister, George A. Papandreou, for a detailed support plan that would reassure bond investors and lower the country's high borrowing costs.
Actually, we can reach the same conclusion by going straight to employment data: The one sense in which Ireland has made some progress is that it has somewhat reassured bond investors that its population will continue to sullenly acquiesce in austerity; as a result, Irish 10-year rates, while still at a large premium, are now 60-80 basis points below those of Italy and Spain.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com