MELTDOWN IN EUROPE IS GETING WORST!!

The meltdown in Europe's debt market just keeps getting worse. In the past several days ...

• Ireland was forced to follow Greece down Bailout Road. The country needed $113 billion in aid to fill a Grand Canyon-sized hole in its budget. Greece got its $148 billion infusion of European cash earlier this year.

• Despite the Irish bailout, European debt markets continued to sell off hard in the other "PIIGS" countries — Portugal, Italy, and Spain. Benchmark 10-year borrowing costs jumped 144 basis points to 5.42 percent in Spain, while Portuguese 10-year yields surged by more than two-thirds to 7.01 percent.

• Worse, the selling is now starting to spread to other bond markets most analysts didn't even know were in trouble! The yield on Belgian 10-year notes just surged to the highest premium versus equivalent German notes in 17 years. Poland and Slovakia were also fingered by the Organization for Economic Cooperation and Development as fiscally shaky recently. That raises the possibility they'll be the next to see their bonds plunge.

The Europeans are considering many additional measures to restore confidence as a result. But the only real, lasting solution is going to be debt defaults.

No more of this "take huge amounts of money from European taxpayers so that bondholders get 100 cents on the dollar" garbage. Instead, we'll need to see actual haircuts in the value of European sovereign bonds. That will help reduce national debt loads to some level that's manageable for the long term.