Eurozone crisis is only now nearing eye of the storm

ON ASSET ALLOCATION

Miton's James Sullivan says the marketplace is too complacent about the prospects for Spain and Ireland.

Since the summer of 2009 asset markets have flourished. Returns across most sectors have risen in a correlated fashion, mainly on the basis of the greater the risk, the higher the return. Economic setbacks have been followed by further QE, while interest rates have remained near zero. The commitment by the Fed to hold rates close to zero for the next two years could be interpreted as the “Bernanke put”. However, not all Board members are in agreement. Charles Plosser said the Fed taking action after stocks fall “signaled we are in the business of supporting the stock market” and his fell...