patrick.net

Earlier this week, one of the Obama administration's top diplomats, Samantha Power, claimed that Russia was responsible for the stunning Italian election outcome, hinting that anyone who dares to point out or discuss the social and economic woes of Europe's grand experiment - and certainly Europe's "refugee problem"- is a Russian operative. In that case, Deutsche Bank must be the Frankfurt office of the KGB, because in an overnight note, the German lender reported something especially troubling for Europe's future and viability: populism has risen to the highest level since World War II.

Commenting on the recent Italian election, Deutsche Bank's Jim Reed writes that relative to other political events in recent years, Italy's general election over the weekend was a relatively calm affair for markets, despite the uncertain outcome. Which was to be expected: in previous political events, the ECB forcefully stepped in and vowed to intervene if turbulence emerged.

However, as Reid adds, "it's hard to get away from the fact that the overall result was another resounding vote for populism. Indeed over 50% of votes submitted was for a populist party, including of course the party with the largest percentage - the Five Star Movement - and a possible kingmaker in subsequent coalition talks - the Northern League."