Another European Bailout?

Is another big bailout under way? Judging from yesterdays hot-and-heavy stock
market rally (186 points on the Dow), a good number of investors think so.
Stocks rolled to a fourth consecutive day of gains on word that five major
central banks, including the Federal Reserve, have agreed to provide an
unlimited amount of three-month dollar loans to European banks. In recent weeks,
customers have wheeled cartloads of deposits out of euro zone banks, fearing
that the banks holdings of Greek (and Portuguese and Italian and Spanish) debt
might cause the institutions to collapse. It was becoming a self-fulfilling
prophecy, where loss of confidence threatened to trigger the very collapse
people feared. Ironically, the odds are now close to 100% that Greece will, in
fact, default on its debt. But if the central banks provide adequate liquidity
to the European banking system, and the Chinese (along with several other
emerging industrial powers) step forward to recapitalize the continents banks
with new equity, the banks will be able to write off their bad Greek loans and
survive to fight another day. Thats what the stock market is celebrating, if you
can call it that. Im certainly hoping policymakers can put this fire out,
because it would make our lives as investors a lot easier. However, Im not eager
to chase stock prices too much higher from here. Above 1,230 on the S&P, Ill
probably be looking to do some selling. On the other hand, certain areas of the
bond market (not Treasuries, for sure!) offer surprisingly good value.
High-yield corporates, for example. I dont really care for the junky junk, but a
better-grade junk fund like Vanguard High-Yield Corporate (MUTF: VWEHX ),