On the day the Catalan parliament voted in favor of “Catexit”
from Spain, the IBEX-35 stock-market index dropped 1.4 percent while the Stoxx
Europe 600 gained 0.3 percent.[1]
The IBEX-35 is an stock-index of companies based in Spain. Investors also sold
state bonds; yields on 10-year bonds rose to 1.574% from 1.558. Even though
these changes were hardly earth-shattering in magnitude, their directionality
points to investor-anxiety. I submit that it was overblown, which suggests that
investors generally tend to over-react to political events.
The full essay is at "Catexit: Political Risk."