MARKETS could scarcely have done more on Friday to register their approval of the progress made in last week's EU summit talks. Equities skyrocketed and sovereign-bond yields tumbled on word of a tentative agreement to allow euro-zone-wide emergency funds to provide direct support to member-state banks. The rally continues this morning, for both equities and bonds. But while markets may continue to express their relief at last week's news, the outlook for the real economy looks increasingly grim. In fact, grim hardly does the situation justice.
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