Wall Street rises on hopes for Cyprus deal, but dips for week

THE REAL LESSON FROM CYPRUS: Anyone who still thinks that the PSI requirement for the bailout of Greece last year was a one-off event is burying his head in the sand — after Cyprus it should be clear that Germany and its northern Eurozone allies will not permit the future bailout of any failing Eurozone economy unless that bailout includes Private Sector Involvement (PSI).

SO WHAT DOES THAT MEAN FOR SPAIN or ITALY? It means that the ECB’s OMT program is not a free lunch for those who hold Spanish sovereign debt. Before the ECB will buy a single bond, bondholders are almost certain to be forced to take a painful “haircut.” Only AFTER they have had their holdings slashed by many percent, will the ECB step in and start propping up prices through unlimited purchases.

Thus, the real market-roiling feature of the Cyprus crisis in not merely that bank deposits are not sacrosanct. No, the real danger is that those who hold Eurozone sovereign debt will start recognizing that Mario Draghi’s promise to save the Euro is not the same as a promise to save those who hold Spanish or Italian bonds.

Greece is helping out Cyprus and people think the problem is resolved? too funny!

Am i missing something? This is like to a panhandler lending money to another panhandler?