This was eminently predictable. No one in Europe believed that a New Democracy victory in yesterday's Greek elections would herald a new dawn of stability and growth. So why did markets climb last week on news of the promise of Euro-printing by central banks in the event of a Syriza victory?
The stubborn facts on the ground remain the same, and the accession of Antonis Samaris to the prime ministry probably makes the problem worse, since he belongs to the delusional pro-EU faction that is refusing to face reality. He and his PASOK allies will persist up until the last moment in the Sisyphean task of heading off Greece's return to the drachma.
President Barack Obama continues to chug the Kool-Aid, proclaiming with no basis in fact to back him up that yesterday's result "indicates a positive prospect for . . . the path of reform." He is at the photo-op called the G20 summit in Los Cabos, Mexico, where he promises "to make sure that all of us do what's necessary to stabilize the world financial system, to avoid protectionism."
So while the tribune of hope and change continues to lead cheers for the unsustainable, the heat and sweat in the Eurobunker will keep on building up. No one should take any solace from yesterday's results. Clearly the markets have--at least for the moment--sobered up.