Asian markets rallied Monday upon news of a massive 750 Billion Euro program from the European Central Bank. The ECB announced that they would make this nearly $1 Trillion dollar war-chest available to help relieve Euro Zone countries in financial crisis. This follows approval of the separate, 110 Billion Euro aid package to help Greece over the next three years. Also, a group of central banks have re-established credit liquidity swaps. The IMF, U.S. Federal Reserve Bank, Swiss National Bank, Bank of Canada, Bank of England and the ECB will participate in buying bonds and accepting sovereign debt. All of these actions together are shaping up to be the financial ‘nuclear option’ to stem the possibility of another round of market meltdowns.

The past several days have seen signs of a more economic crisis. Strikes and riots in Greece began last Wednesday as protesters vented their anger over new taxes and spending cuts voted by the Greek Parliament on Thursday. That evening, a group of rioters clashed with police outside Parliament in Athens. At nearly the same moment the violence appeared live on world-wide television, stock markets in the United States went into free-fall. The Dow Jones Index of the New York Stock Exchange lost nearly 1,000 points within a mere twenty minutes. Investigators are still looking into the direct causes for the plunge, however, early reports of a ‘fat-finger’ trade made in error seems to be discounted.

European markets had been nervous all of last week as the fate of the Greek bailout remained in doubt. Some analysts believed that even with the bailout, Greece could still go insolvent. Bond ratings of other nations, such as Spain and Portugal, also contributed to the market slide, as well as warnings from the European Commission on finances and economic policy of other nations facing sovereign debt issues, like Italy and the UK. The idea of the ‘nuclear option’, a plan for a massive bailout package, began to gain more favor.

By the weekend, the Greek bailout was approved by all participants, including the International Monetary Fund on Sunday morning. The IMF would have nearly a one-third stake in providing support to Greece, with the ECB and other Euro Zone member nations covering the majority. Sunday also saw a whirlwind of activity between the United States and European nations discussing the other two facets of the nuclear option, the ECB debt fund and the team effort of central banks. The ECB began buying ‘toxic bonds’ from EU nations on Sunday night. This move prompted the Euro and U.S. dollar to gain in Asian currency markets. Stock and other markets followed suit. As dawn comes for Monday in Europe and America, we will see if their markets respond likewise in a positive trend.