Redwood: Why the bears are focusing on Italy

A week of near farce in Greek politics has ended with a government of national unity accepting the previously arranged deal.

Markets see that as progress, and will be temporarily relieved. After all, they argue, a referendum has been prevented, which could have delayed the deal and might even have seen it voted down. The Greek people have looked over the precipice and for the time being seem to have decided to stay with the euro. The opposition politicians have come round to supporting the deal, and will be locked into a national unity government to try to implement it. That is what passes for improvement. It's business as usual. Unfortunately, the underlying problem remains. The Greek people may not yet want ...