The situation surrounding the recent Greek “non default” has demonstrated how far down the rabbit hole we have traveled.

The ECB coupled with some heavy duty political allies engineered a 50% principal reduction for Greek bondholders.  For all but a few of the purchasers of Credit Default Swaps, actually the ones who utilized sophisticated counsel to amend the standard swap agreement, this was not considered a “default” that would trigger the payment required for that event.

My own viewpoint is that the notional value of swaps outstanding were probably some unknown multiple of the actual amount of Greek debt and that the payment required on the contracts would have created more of an economic catastrophe than the “non default”.

Having said that, the success of the measures over the last few weeks has been to kick the can a little further down the road.  The Greek populace is still not ready to accept the draconian level of austerity that is required and the stronger Euro nations do not want to set a bad precedent.

The bottom line is that it is too early to celebrate the end of the European debt crisis.