Greece and the moral hazard dilemma

SO Greece might very well default on its payments, reject its creditors' demands, declare itself bankrupt and exit the eurozone. So what? All these events have been very real possibilities for about five years and if markets are even half as efficient as they are supposed to be, then everything should already have been discounted and factored into stock prices, shouldn't they?

Not really. If anything, the extreme worry and resulting collapses over the past fortnight that culminated in the Greek government's bizarre decision to hold a referendum next weekend suggests that despite having had years to figure out the ramifications of a "Grexit" and the worst-case impact on asset prices, markets did not discount anything and are now scrambling to make up for lost time.

Granted, markets are a lot more inefficient than textbooks would have finance students believe and it is the existence of inefficiencies which offers traders and asset managers profit-making opportunities.