A proposal by the Sage of Omaha, the respected investor Warren Buffett, to help out the struggling US monoline insurers has put some life into the market.
The FTSE 100 is now up 114.1 points at 5821.8, while Wall Street has opened around 80 points higher.
Buffett told CNBC he had offered to take over liabilities for the monolines in a deal that would cover $800bn of municipal bonds. He apparently offered this to MBIA, Ambac and FGIC but one of them - he's not saying which - has already turned him down.
But this seems less like Buffett riding to the rescue when you realise the proposal would leave the monolines with a stack of riskier debt, including collateralised debt obligations. Most people thought the municipal bonds were in good shape anyway, compared with the insurers' other liabilities.
So, in reality, the markets are likely to remain volatile until the extent of this particular bout of toxic debt is much clearer.
