After thinking about yesterday's announced deal, I have concluded; "It don't stand a snow-balls chance in hell".
The two main provisions are:
1) It's all voluntary
2) Banks must increase reserves
Let's start with the second one: Is this possible? They're broke, how are they going to accomplish this.
But the first one is a real gasser: Since the banks and private institutions agreed to a voluntary 50% loss of capital, it's not a credit event. Therefore, the 'credit default swaps' won't pay. It's not a default.
It's like a major storm blows thru your neighborhood, but all the insurance companies figure out how to renege.
John Mauldin dug into this subject about 3-4 months ago. He found out that American banks did not have a lot of direct exposure to Greek an European debt, but they had sold about all the CDS protection, which means they are the insurance company.
So, .......do you think all these buyers of insurance (CDS) are going to sit back and let these worms out of their obligation to pay? Some will probably skip the courts and simply assassinate some CEO's.
It's a lot of money!