This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the top of any article.
EU Summit Decision: Just Kicking the Can Down the Road—Searching for Alpha for July 2012
The European Union summit held last week in Brussels resulted in three main policy changes to the current crisis. Most important, bailout fund monies can be used to recapitalize banks directly, rather than via governments. This was meant to reduce the so-called “vicious circle” of debt between governments and banks.
The market’s reaction was significant on Friday, with most exchanges gaining nearly 3% on the news. But is this really enough to change the tide of the region’s fiscal woes?
That is doubtful. I’ve spent the last few weeks (please see our four-part blog series on the EU) discussing how the only real, permanent solution involves Germany making significant concessions, including shared risks on further debt obligations (i.e., Eurobonds). Nothing else will really change the fundamental challenges facing the troubled eurozone.
One of the better articles I’ve seen on the crisis thus far can be found in The New York Times. I look forward to decisions that are meant less to make headlines than about real and lasting solutions to the euro crisis.
See all the blogs in our multipart series on the eurozone crisis.
About the Author
Ben Warwick, Quantitative Equity Strategies
Veteran investment strategist Ben Warwick brings 20 years of investment management expertise to AdvisorOne.com in his blog, Searching for Alpha. His market and economic insights provide readers with an insider’s view on generating alpha through asset allocation, the use of strategic portfolio “tilts” and alternative investments.
Ben Warwick founded Quantitative Equity Strategies (QES) in 2002 as a platform for implementing his quantitative investment strategies. The firm manages assets with traditional long-only equity and fixed income, private equity, managed futures and alternative investment mandates. QES has developed an industry leading expertise in building investment programs that can replicate alternative returns, while offering daily liquidity and transparency. These products include the HFRq, a hedge fund replication strategy developed in concert with Hedge Fund Research in Chicago; the Managed Futures Beta Index, with Aspen Partners; and the Nomura QES Modeled Private Equity Returns Index (PERI), which was developed with Nomura Bank and Preqin, the leading source of information in the private equity industry.
He is the author of several books, including "Searching for Alpha: The Quest for Exceptional Investment Performance," (Wiley, 2000) and "The Handbook of Managed Futures," with Carl Peters, (McGraw-Hill, 1996). He can be reached at ben@qesinvest.com.
Comments
