Here is one illustration of how bad sentiment becomes in finance-land: at a symposium of terrorism and security threats at the Council on Foreign Relations that I attended, the experts were markedly more sanguine in their tone and approach to issues such as biological warfare and hand-held missiles taking down a commercial airliner than market mavens are about the future movement of stocks and bond yields.

Living through these past weeks on Wall Street has been a dark tour through a bruised psyche. Yes, the Eurozone politicians ranging from Angela Merkel of Germany to the buffoon Silvio Berlusconi of Italy to the inscrutable (aren’t bankers always?) head of the European Central Bank, Jean Claude Trichet, have been less than inspiring in their assurances. They face domestic political opposition to further bailouts for weaker Eurozone members because there as here it has been easier for politicos to blame others than explain how the fate of postal worker in Athens is ineluctably bound to that of a burgher of Dusseldorf. And the continental drift does raise the specter that the Europeans will not pull a last-minute rabbit from their hat, that there will be no “debt deal” equivalent to the U.S. debt ceiling deal, which however ugly, was still utterly necessary…

Today, it is widely assumed that a default in Greece will send the world into a financial and then economic tailspin. That may be, but it is also possible given what has been happening the past days that the global system is developing antibodies to contagion in peripheral areas: frostbite in your fingers leads to a loss of fingertips, not death. Reports that China may help shore up Italy’s finances are one sign of those antibodies. The differential performance of the U.S. and European equity markets is another.