First: Only private sector banks are required to share the 50% hair-cut. No public sector will have to accept the same terms and thus the total haircut is only 20% of the total Greek debt outstanding.

Second: Private banks will voluntarily have to surrender their bonds and get the 50% reduction. By making this voluntary, this does not cause a credit default, and thus the world stock markets have factored in this favorable outcome. 

The big problem is all the private banks take out Credit Default Swaps (CDS) on their debt, which is basically insurance in case Greece defaults, and the payments to them for a true default will be higher than the 50% haircut. So they will NOT tender their bonds to get the 50% payment and will wait for the true default.

Again, NOTHING HAS BEEN SOLVED. Only the can keeps getting bigger and bigger and our boot used to kick it is getting tired.

Until the next version of Quantitative Easing is announced, the markets will be on a roller coaster to hell. Sadely this roller coaster always ends up at the same place. A reset to lows and a re-birth. I believe that level will be around 3500 on the DOW/Gold adjusted chart. Currently we are at 7000, which implies a 50% further reduction from present values. That would be DOW 6000.

If you haven't read about the DOW/Gold adjusted chart, google it. This puts into perspective just how much we have lost in the last 10 years to inflation and loss of purchasing power....

As of Friday, 10-2