"Anesthetized" Markets

Gavyn Davies notes, rightly, that global securities markets have decoupled from the eurozone crisis. As the graph shows, peripheral eurozone bond spreads have increased even as global equities have risen. Investors may be in for a rude shock as it becomes clearer that austerity cannot continue and political unrest blocks the technocrats' attempt to decide unilaterally who will bear the heaviest burdens.