Earlier this morning, it was announced that what looks like a substantial European debt-crisis deal was forged.
Maybe they were listening to what Charlie Munger said earlier this week. In this interview, Charlie said the following about how the region's leaders are handling the debt crisis:
Munger Says Europe Leaders 'Behind the Curve' on Debt Crisis
"They have to stop shooting at this elephant with a pea shooter."
The article points out that, on prior occasions, Munger has praised policy makers in the U.S. for how they handled the 2008 bank bailouts.
Markets may be rallying in reaction to this deal...
Wall Street Journal: U.S. Futures Rally After EU Deal
...but it's early. This is all still very short on the kind of details needed to understand what the full long-term impact of the deal is likely to be.
This Barron's article goes on to point out the deal may prevent a worsening of the crisis but "it is far from sufficient to address the region's economic woes".
This article also added some historical perspective. It points out countries usually escape a debt trap via devaluation.
The burden of debt is reduced by paying with depreciated money and competitiveness is improved with cheaper exports.
Greek Mythology: Deal Will Solve Debt Crisis
The article adds that most modern economists (from Keynes to Friedman) like letting the currency bear the burden of the adjustment.
That option doesn't exist for European countries. At least it looks like European leaders might be, in Munger's words, getting a little less "behind the curve" and may no longer just be using a "pea shooter" to deal with the mess.