Market reaction to anti-austerity elections.

Dow Jones	13008.53	-29.74	(-0.23%)
S&P 500	1369.58	+0.48	0.04%
Nasdaq	2957.76	+1.42	0.05%
S&P TSX	11844.62	-26.61	(-0.22%)
EURO STOXX 50	2283.09	34.75	1.55%
CAC 40	3214.22	52.25	1.65%
BSE Sensex	16912.71	81.63	0.49%
S&P/ASX 200	4301.3	-94.7	(-2.15%)
Shanghai	2451.12	-0.89	(-0.04%)
Nikkei	2259119.14	-261.11	(-2.78%)
Hang Seng Index	20536.65	-549.35	(-2.61%)
TSEC	7538.08	-162.87	(-2.11%)

Before European and North American markets opened up this morning, the media was quick to pounce on the uncertainty of the anti-austerity election outcomes.  There was no retraction issued however, when most of the western markets ended up in positive territory.

Perhaps it's (western market reaction) because upon reflection, nothing really changed.  The Eurozone crisis was always present, even if put off for another 6~12 months under the Germany+ECB plan.

Let me sum up what Germany + ECB response was to the Eurozone crisis:

If you continue to cut slash government spending in order to get below our targeted deficit-GDP and debt-GDP ratios, we'll swap out your high-interest loans for lower interest loans.  In effect, they were giving Greece breathing room, hoping that the economy would recover before the crisis returned.  So far though, unemployment continues to increase in Greece.

They never addressed the core problem of having a unified currency other than to reemphasize that all EU nations must stick to their Maastricht Treaty 3% deficit-GDP and 60% debt-GDP ratios -- which by the way, half of the EU nations do not comply with, as of March.

Germans should be worried.

If Greece and other periphery nations leave the Euro currency, the Euro will look more like a noose.  Having resurrected their own currencies, countries like Greece will be able to rebalance their labor and material costs relative to the Euro, making Greece look like a bargain investment zone compared to the Eurozone.  In turn, existing Greek debt will cheapen with inflation.