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Tuesday’s monumental rally in the equity markets was driven by European hopes, with the euro rising as high as $1.3662 and the dollar index down over 1% at one point.

News that Angela Merkel, Germany’s Chancellor, was firmly behind Greece as reported by MarketWatch, provided much of the impetus.

German Chancellor Angela Merkel said Tuesday she is confident Germany will support Greece and that she wanted the country to remain in the eurozone, according to media reports, following a meeting in Berlin with Greek Prime Minister George Papandreou.

However CNBC reported that Angela Merkel could be facing opposition to her own words, although she may pull it off.

Germany's Angela Merkel has convinced some rebels in her party to back new powers for the eurozone's rescue fund in a vote on Thursday, but may still have to rely on the opposition to get the measure passed, in what would be a humiliating setback.

In addition what appears to be popular support for the opposition is only a vote against the incumbents.

"The real question is how this vote affects the German electorate longer-term," Josef Schlarmann, who represents the "Mittelstand" of German industry in the CDU, told Reuters. "Roughly 80% of German voters are against an extension of the eurozone's rescue mechanism, while 80% of politicians are for it," he said. "The political establishment and electorate are on a collision course."

Finally, late in the afternoon the Financial Times reported that a “Split opens over Greek bail-out terms.”

A split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, according to senior European officials.

And here come the private “donors” and how they must share in the pain, precisely pinpointing the market's issue at hand. It is not so much about sovereign debt, because we know that they’re dead in the water, but whether the private sector gets to eat canned sardines for a while.

Meanwhile the KBW Bank index (NYSEARCA:KBE) had risen as much as 3.4% by 10 a.m. on Tuesday, raising hopes that the financials had found their footing. But then the index resumed its negative trend and the gains turned into a loss of 0.5% by the end of the day, while the multi-trillion euro injection talk started to take a back seat to the latest conflicting news.

I think I need to start using TIVO to ensure that I don’t miss anything, and I need to watch the daily 300 point gyrations in slow motion with the news synchronized to the ticker tape.

On Wednesday Finland's parliament approved the expansion of the eurozone bailout fund, the European Financial Stability Facility, according to MarketWatch.

The changes will give the EFSF power to intervene in sovereign bond markets and to provide credit lines to struggling governments. The measure passed Finland's parliament in a 103-66 vote. The changes require approval of all 17 eurozone member parliaments.

On Thursday Germany will vote, and a solid resolution continues to be elusive.

The continued dissemination of potential solutions that turn out to be less than reliable will start wearing thin with investors, and will continue to erode the very foundation of our system: Trust. And without it, we could wake up one morning and wonder as to what happened.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Europe To Markets: We Fixed It But Still Unsure About Outcome