Zero Hedge 
February 6, 2013
The coincidental resurrection of Bunga Bunga boy Berlusconi, amid financial and political fraud allegations (and facts), appears to have struck fear into the heart of European investors. The Draghi ‘promise’ seems to be getting ready to be tested as ‘populist’ Berlusconi closes the gap on his adversaries in Italy’s election – and with it brings the threat of an end to austerity and any sense of stability in the new normal fiscal and political calmness that has ‘apparently’ existed for a few months. As the chart below indicates, via Bloomberg, as interest has risen in Berlusconi, so stocks (and Italian credit markets) have plunged at their fastest pace in five months. Recent polls by Sky Italia show the gap narrowing every week as the Monti Paschi debacle drags more and more of Europe’s elite into its quagmire. The critical aspect of this renewed ‘fear’ is the thesis supporting much of the world’s risk-assets is predicated on a few fulcrum securities in Europe indicating a cessation of tail risk – with Italian bond yields at six-week highs, concerns are starting to show.
Italian stocks collapsing as Berlusconi’s popularity rises…
and Berlusconi’s poll results show his popularity is rising consistently…
As Bloomberg notes:
Prime Minister Mario Monti replaced Berlusconi in November 2011, leading a government of non-party political figures in an attempt to convince investors that the country could manage its debt. Berlusconi has pinned his comeback attempt on a pledge to reverse Monti’s budget rigor and on Feb. 3 the former premier promised to abolish a property tax and give cash back to voters.
and from now until the elections, opinion polls go dark.
With Italy (and Spain) as seemingly fulcrum risk securities – will we see a repeat of September’s resync?