So because bond holders will be left with worthless bits of...

So because bond holders will be left with worthless bits of paper (CDS) that they thought insured them against the risk of a default, they are going to look to Ireland, Portugal, Spain, Italy etc., - who will think If Greece can get away with this so can we - and say sorry but this is too risky now and dump all Euro sovereign debt. Either that or much higher yields will need to be offered but that is not really possible as the cost of servicing that debt is simply too high with no real growth prospects, trade deficits, high levels of private debt and depression level unemployment. So the ECB and the FED will have to step in with massive injections of liquidity to prevent an economic calamity, more bank runs and the collapse of the Eurozone - hence the QE is coming and it will be unprecedented in size. The irony is that the banks will be forced to buy more of the debt that nobody else wants with the free "money" they are given.