European Elections: At Full Speed Toward the Debt Iceberg

"The beginning of Europe's austerity crusade dates back to Thanksgiving of last year, when Germany essentially failed an auction of its bonds. That was the “come to Jesus” moment that got the ball rolling on the notion that the Ponzi scheme known as “sovereign debt” financing had to come to an end or else. Coincidence or causality, it also marked the beginning of the equities run that saw the S&P 500 (^GSPC) rise 22% in about 4 months.

Fast-forward to the first week of April, when Italy's “technical” government bowed to the unions on labor reforms, abandoned any kind of serious fiscal plan, and set in motion the suicidal idea (see Spain on the Brink as Italy Commits Fiscal Suicide) that austerity and tight deficit controls is no way to go through life.

Spanish and Italian governments have since been leaning heavily toward resuming higher deficit spending, and Sunday's election of a socialist in France, and a strong showing in Greece by any group willing to backtrack on the terms of the recent bailout, have all but buried any notion of embracing fiscal sanity. Again, coincidence or causality, the first week of April marked what increasingly appears to have been a meaningful top in equities..."

at http://www.benzinga.com/news/global/12/05/2564723/european-elections-at-full-speed-toward-the-debt-iceberg?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+benzinga+%28Benzinga+News+Feed%29