Some smart hedge funds have already pulled out of the crushing attack on Greece, fearing that the market logic could be ovewhelmed by political intervention, as I pointed out earlier this week.
On Thursday night Christine Lagarde raised exactly this issue on the BBC (link may not be accessible from outside the UK).
Asked what message the eurozone countries wanted to send to “speculators”, she said (my transcription):
Number one I think they had better be careful. There is clearly a statement of solidarity – we are closing ranks. Whether we are big member states or small member states we are all in this together and we are not going to let any of us down. That’s point number one.
Point number two, I think that, you know, what we are going to take away from this crisis is certainly a second look at the validity, the solidity of CDS on sovereign debt. Clearly we need to look deeply at that and propose changes.