Nouriel calls BS on Eurozone agreement

Roubini (or, rather, his analysts; no link) says that when investors recognize the holes in the EZ agreement, the recent stock mania will recede. But there is some optimism that most bondholders will accept the haircut and not trigger a default in order to recover on their credit default swaps, possibly because those bondholders are banks who at this point exist at the sufferance of the German government.

Roubini also says that a recession is fairly likely in Europe, the UK, and the US.

More as more specifics become available.
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Added: Peter Spiegel of FT suggests that they will offer bondholders higher interest rates on reduced principal. This is an interesting approach. 1% interest on $100 is the same as 2% interest on $50. Or, one can change the term of payment. Paying 1.5% interest over 10 years might seem more attractive than 2% over 5 years. This would explain why default might not be triggered, although a non-Euro court might not agree.

But there’s no question that Nouriel is right: financial engineering is not the way out of this crisis. Growth is the way out.