Krugman on the bailout - and why the markets aren't impressed

"The basic situation is that given the cost of rescuing Ireland’s banks, and the damage harsh austerity is inflicting on Ireland’s economy, investors are understandably skeptical that the Irish government will actually be able to meet its commitments. That’s why rates are high — to compensate for a possible default." You can read the rest of Paul Krugman's post today here.