Changing $50 billion!
Your favorite insolvent-but-for-the-grace-of-god-and-the-taxpayer banks are still in the game, player. Don't you worry about that...
...while Wall Street firms were cutting their exposure to Greece and Ireland and Portugal, they were increasing their lending and bond buying in Italy, France and other European nations that seemed more financial secure.
Goldman Sachs (GS), for instance, bought $2.2 billion worth of bonds in Italy, which is widely seen as the next troubled nation after Spain, in the first three months of the year. Bank of America (BAC), too, added over $600 million of Italian government bonds to its portfolio in the first three months of the year. Morgan Stanley (MS) added $555 million in French government bonds, after largely betting against the nation's debt in the year before.
Maybe these bets are sound ones? Maybe (hopefully) Europe can stay together through a combination of bailouts, treaty rewrites and poetic speechifying, in which case these bond holdings may pay off handsomely for the US banks.
And so what if they don't - write 'em off and play a different game! It's not like any of this is real money we're talking about, just blips on a computer screen.