The world is running out of financial saviours.
First, national governments saved the banks with bailouts, piling up huge debts in the process.
Now that countries are running out of money, the supra-national organizations like the European Union and the International Monetary Fund are stepping in to save nations with yet more bailouts.
The $1-trillion (U.S.) loan package unveiled Monday to avert potential bankruptcy for Greece and some of its neighbours pushes the world ever closer to the end of the list of bodies that can pay the mounting rescue bills.
With the huge backstop package unveiled by the EU and the IMF, the parents have co-signed loans to buy time for the spendthrift kids in Athens, Madrid and Lisbon. Now it's time for a little serious discipline.
Beneath the veneer of optimism about the so-called "shock and awe" cash infusion, there is skepticism from investors that it will matter. It's a necessary step to head off immediate danger, but the bailout won't solve anything in the long term if the children - the politicians in those southern European capitals, along with those in other seats of government ranging from London and Washington to Toronto and Sacramento, don't learn the proper lesson.
That lesson is that this was a very close call, as credit markets in Europe were starting last week to feel uncomfortably reminiscent of some of the worst days of 2007 and 2008. Do politicians around the world realize that, and get serious about cutbacks and debt reduction? Or do they say thanks mom, thanks dad, and stay on the spending bender they and their citizens have enjoyed so long by clinging to the notion of buying their way to growth?
It's easy to read victory into Monday's big jump in equity markets in the wake of the bailout, but in most cases stock investors have been the dumb money in this financial crisis that began in 2007. Stocks rose almost all the way through 2007, while behind the scenes credit markets and interbank lending were becoming increasingly unhinged.
There are lots of signs this time around too that the bankers and credit markets who lend to governments see things differently than congenitally hopeful stock buyers.
Yes, Greek bonds soared Monday, but only back to levels of three weeks ago when the crisis was in full swing. The nation's borrowing costs remain far above where they were even in March.
After rising for days as banks became more nervous about a Greek contagion, interbank lending costs barely budged. The TED spread, a widely watched measure of bank lending fears in the U.S., slipped only to 28 basis points from the 31 points it stood at on Friday. The Libor-OIS spread, another measure of bank concern about the health of the financial system, actually priced in more risk.
Gold too held its ground near highs.
To be sure, aside from gold, these measures of investors' worst fears are nowhere near where they were during the depths of 2008. They are, however, evidence that credit markets want proof in the form of austerity in action rather than just promises.
The idea of using more debt to pay for more stimulus to grow out of the mess, à la the plan in Ontario, is increasingly falling out of favour with the investors who do the lending.
So far, the early signs are that the message is getting through. Greece's government is pushing ahead with its austerity plans, protests be damned. Spain is talking about speeding up its deficit cutting with an additional €15-billion ($19.6-billion) in spending reductions, and realizes that "consolidation has become more important than growth," according to Spanish Finance Minister Elena Salgado.
That statement encapsulates the grim balance politicians face. The way forward for indebted governments evokes the summit ridge of Mount Everest - a narrow path to success bounded by deadly falls on both sides.
On one side, credit markets wait to pounce should the austerity measures not be enough. On the other side, if they are too much, lurks the feared double-dip recession, which prominent Morgan Stanley executive and economist Stephen Roach warned Monday still remains a serious risk.
The dark joke on Everest is that if you do tumble off the summit ridge, it is better to slide down the Tibet side than the Nepal side. The drop into Tibet is bigger so you will live a little longer, but as the climber and doctor Ken Kamler once said, "Either way, you fall for the rest of your life."
It's hard to say which side is Tibet when looking down from the mountain of government debt.
The only option for nations is to keep trying to conquer it, one onerously repaid dollar at a time, all the while knowing there may be nobody left to catch them if they fall.