The world has heaved a sigh of relief that Eurozone ministers have sealed a 130-billion-euro ($172 billion) bailout for Greece to avert a massive default never moth after persuading private bondholders to take bigger haircuts and persuading Athens to commit to deep cuts. Don't hold your breath, it's not going to work.

Peter Spiegel from the Financial Times has obtained a confidential 10-page memo distributed to senior officials in Europe over the last week, which lays out the truth. The memo spells things out in no uncertain terms and suggests Greece will probably need another bailout after this one. Spiegel says the document makes it clear that Greece won't be able to climb out of this debt hole. "It warned that two of the new bail-out's main principles might be self-defeating. Forcing austerity on Greece could cause debt levels to rise by severely weakening the economy while its €200bn debt restructuring could prevent Greece from ever returning to the financial markets by scaring off future private investors. 'Prolonged financial support on appropriate terms by the official sector may be necessary,' the FT said."

In other words, the medicine being fed to Greece, driving down wages and costs through austerity measures to make the Greek economy more competitive internationally, will lead to higher debt levels in the near term that may never be overcome.

Arjuna Mahendran from HSBC has spelled it pretty clearly. It's not the deal that will save the global economy. "Greece has gradually become less relevant over the last few weeks. It's also to do with the fact that other European countries, the troika i.e. the EU, the IMF and the ECB have effectively ring fenced Greece from having any repercussions on its neighbours in Europe if it were to default."

What he should have added is that Greece has been ring fenced for now. This deal just buys time. The Greek government won't pull it off so there'll be another bailout. Greece will be reduced to permanent beggar state.

Analysts say the stock market is telling us that Obama should be writing his inauguration address now.

In a recent paper, Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results, Robert R Prechter from the Socioeconomics Institute in Georgia studied every presidential re-election campaign in US history back to George Washington's successful bid of 1792 and found that incumbents who served during periods of rising stock prices typically do better in the elections than those who served during periods of falling stock prices.

The Dow Jones industrial average has soared 62 per cent since President Barack Obama took the oath of office during some of the darkest days of the Great Recession. Check the record and you will find the Dow was just below 8,000 then. It stands near 13,000 today.

Commentator Bison Messink draws parallels with the way Reagan creamed Mondale in 1984. Sure the economy was in bad shape under Reagan but America had pulled out of a recession and Reagan exploited that. "But speaking of Ronald Reagan, we tend to forget that the American economy was a disaster for most of his first term. When the country came out of the recession prior to the 1984 election, Reagan was able to blame the problems on Jimmy Carter and take credit for the turnaround. Walter Mondale – Carter's Vice President – won the Democratic nomination over a field so weak that his top rival was done in with a rather lame debate quip: Where's the beef?, and was then slaughtered by Reagan in the general election. We won't any time soon see a Presidential candidate carry 49 of 50 states like Reagan did in '84 – we're too Red & Blue for that now – but if the 2012 economy picks up, the anti-Obama message of the right won't gain a foothold, and Barack gets to claim economic victory while indicting Republican policies. He'd win in a landslide."

At last the Germans have made it clear what they want to do to Greece. They want to turn it into a dictatorship run by technocrats. That's come from no-one less than German Finance Minister Wolfgang Schäuble who has suggested Greece delay elections planned for April. Instead, he has suggested it adopt a technocrat government free of politicians.

As reported here, Schauble does not see this new Greek technocrat government containing Greek politicians.

Writing in the Financial Times, Wolfgang Münchau says Greece must default if it wants democracy. "It is one thing for creditors to interfere in the management of a recipient country's policies. It is another to tell them to suspend elections or to put in policies that insulate the government from the outcome of democratic processes."

The only solution, he says, is to establish a United States of Europe, with one Federal government in charge of interest rates and taxes and all the Eurozone members working as states. "The situation highlights the political vulnerability of the current eurozone rescue strategy. Let us set economic arguments aside for once, and consider the politics. Anybody calling for an increase in the rescue package should remember that solidarity between governments is close to being exhausted. This has happened even before a single cent has crossed a border. It is also the strongest argument for a fiscal union. If you want to shift hundreds of billions of euros around, you simply cannot do this on an inter-government basis, where Germany, the Netherlands and Finland pay for Greece, Portugal and Ireland. For that, you need a federal system. You need it not for reasons of economic efficiency but to prevent a Germany-versus-Greece type conflict. If a fiscal union turns out to be politically unacceptable then we simply have to admit that a transfer insurance system cannot and will not happen."