Last night's action in Europe highlights that despite very low yields, quick developments can destabilise markets and lead to some sharp losses

Perpetual Equity Investment Company

Perpetual Asset Management (Australia)

Last night's action in Europe highlights that despite very low yields, quick developments can destabilise markets and lead to some sharp losses. Draghi's 'whatever it takes' speech may have stabilised market sentiment in 2012, but it led to complacency in solving the European debt crisis. The problem with his claim is that it can be said only once, and then markets will expect action. Indeed, his 'talk' approach has failed, as the basic problem in Europe has also been the state of bank balance sheets and the amount of government and household debt. In 2009, the US solved its bank problem first (equity injection), households second (record low interest rates/QE) and the government's last (through growth). Europe has designed its solution the wrong way around by trying to fix government first (through austerity), then households (low rates, but no QE) and banks have never been solved at all. (VIEW LINK)


3 topics

Perpetual Equity Investment Company
Perpetual Asset Management (Australia)

The Perpetual Equity Investment Company Limited is an ASX listed investment company offering investors access to a portfolio of predominantly high quality Australian and global listed securities, selected by Perpetual Investment Management Limited.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.