Draghi's Job Just Got A Lot Harder (by Nick Andrews, GaveKal Capital) - The specter of debt default is once again haunting the eurozone

Draghi's Job Just Got A Lot Harder (by Nick Andrews, GaveKal Capital) - The specter of debt default is once again haunting the eurozone. Failure by the Greek government to get its candidate elected president in a December 17 parliamentary vote will lead to a general election in January; an election that the radical left wing opposition party Syriza, which is currently ahead in the opinion polls, stands a real chance of winning. The prospect triggered a sharp sell-off in Greek government bonds yesterday, with the three-year yield jumping 181 basis points, while the stock market fell 12.8%, the most since 1987. Looking beyond the immediate market volatility, however, renewed political uncertainty will provide fresh ammunition to the northern European opponents of quantitative easing, and could delay a decision on full QE by the European Central Bank until March 2015 or later; a delay which would be negative for European stocks and peripheral bonds, although neutral to positive for the euro. cont'd: (VIEW LINK)