I want to talk about the losers in this process.
The biggest loser is JC Trichet and the ECB. Man they really had to eat it. JC thundered "no default ever" to whoever would stick a microphone in front of him and threatened that in the event of a default, the ECB couldn't hold Greek debt. Well, now we (a) have a default and (b) the ECB will continue to hold, and add to its holdings of Greek debt. By acting like he was large and in charge when he was not, JCT has made himself look like a clown and damaged whatever positive reputation the ECB still had.
The next big loser is the sovereign CDS market. We have an obvious default, that according to my understanding (and that of the WSJ), will somehow NOT be creating a credit event. That is, holders of CDSs on Greek debt will NOT be getting payouts. In other words, the sovereign CDS market has been revealed to be a mug's game and may find it hard to survive. Governments may think they have won against the evil speculators, but all this victory will really do is drive up interest rates on sovereign debt (ceteris paribus, y'all).
The next loser is the German taxpayer, especially if the Eurolords actually follow through with their threat of a "Marshall plan for Greece".
Hey Angus! How about a word or two on the winners.
Well, Ireland and Portugal are big winners as they got the interest rates on their bailout loans cut dramatically without having to make any additional changes to policies. A good deal for them.
I also think holders of Greek debt are winners here, as they can lock in a decent return on their holdings for a not too bad haircut. I would take one of the deals.
Any other losers?
Finally and amazingly, Greece itself is again a loser in its own bailout. Some things never change I guess. They still have a mountain of debt, they still face prolonged austerity and God help them if the Eurolords follow through with their politically correct, bureaucratically bungled, economically useless version of a Marshall plan for that beleaguered island.