The European Crisis Is Just Beginning

From BBC News

Here is a link to the BBC video.  The code stubbornly does not want to function on my site." >

My view:

Deflation is probably inevitable at this point for the Eurozone.

Repeated attempts to restart the economy by tinkering with interest rates and suppressing longer term interest rates through the LTRO has been completely unsuccessful.

Additional debt has not cured a debt fuelled crisis.

Insolvent Greece will leave the Euro as severe austerity has only increased budget deficits making it impossible to pull out of its death spiral.

Portugal, Spain, Ireland, and possibly Italy and others may follow soon afterward.

So the question is, how are banks, proven to be insolvent but now highly liquid, going to deal with the bond write offs that at this point seem "baked into the cake"?