Treasuries remain under pressure as equity markets around the globe rally following yesterday's CNBC report that European authorities were constructing the framework for a rescue plan. Greek leaders appealed for support at home and abroad to avert default before key legislative votes as the U.S. criticized European leaders for moving too slowly to stem the debt crisis. In recent remarks from Tim Geithner and the President the heat is building around the world for something to be done, and quickly. Geithner said Europe has “not very much time” to act. Geithner called on euro-area leaders to beef up their 440 billion-euro ($594 billion) bailout fund, warning that failure threatened “cascading default, bank runs and catastrophic risk.”
Global markets rallied overnight as optimism increased that finally---maybe--Europe's leaders have gotten the message that continued delays will send the US back into recession along with all of Europe and drag down other regions with them. “What I learned in Washington is that Europeans finally get it,” Mohamed El-Erian of PIMCO said in an interview this morning; “they are going back and will try to do something about it. This was a very important wake-up call for Europe.” A European Commission spokesman told reporters in Brussels yesterday that euro-area ministers are unlikely to approve the payment at their Oct. 3 meeting as originally planned. Greece has said it needs the money next month.
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