Quite why anyone thought that Italian politics would get its act together is beyond me - any electoral process that involves Silvio Berlusconi and one other comedian, Beppe Grillo, who picked up a quarter of the country's vote, redefines the concept of dysfunctional. Italy, as one wit pointed out, is ungovernable, a constant shadow hanging over the stability of the continental trading block.
The inevitable resurfacing of eurozone troubles makes what has been happening on the markets over the last month or two all the more puzzling. The ECB's much lauded intervention last year now seems more than ever just a massive broom sweeping problems under a debt-riddled carpet - and that such a rather predictable problem as an Italian electoral mess can knock markets so significantly certainly suggests confidence wasn’t exactly brimming over in the first place, contrary to what a soaring stock market would imply.
I'd argue, in fact, that government intervention does not inspire confidence in the truest sense of the word - instead it inspires complacency, along with a rush for risk assets and a quick buck, which is why the dive back into safe havens comes so quickly at the slightest hint of trouble. It is a source of volatility, not stability. It has created a traders' market, not an investors' one. It has rendered risk-free assets risky.
Certainly if the austerity backlash that has caused such consternation in Italy spreads throughout Europe, we face another dangerous period of uncertainty as the ECB attempts to rewrite its bailout rulebook. The risk of this happening is high - the IMF added fuel to the fire of anti-austerity protests by recently admitting it had got its sums wrong on Greece, an example, as columnist Martin Wolf argues, of austerity simply rendering the weak weaker. Another way needs to be found.
Whether that way involves negative interest rates, an idea floated by the Bank of England's Paul Tucker, is less clear. The idea is that making banks pay to keep money on deposit will instead encourage them to lend. But against a backdrop of austerity this feels like trying to jump start the economy with the handbrake left on - and such a desperate measure would surely encourage greater fearfulness rather than confidence.
It would also spell more pain for already hard pressed savers and pensioners, which is why it's all the more important to get one's investments in order. With Isa season upon us now is as good a time as any to do so - and you'll find more than 50 Isa ideas in this week's issue to help you make the most of your allowance.
