Europe represents the largest part of the developed world’s equity markets outside the United States. An analysis of opportunities in Europe requires a perspective on economic performance that is in some ways like our own, and in other ways very different. On the one hand, Europe offers lower multiples and higher yield than U.S. equities, but growth has been stagnant for a long time. Much of the issue surrounding European prospects involves deep-rooted structural issues intertwined with a set of often-conflicted macroeconomic policies. The combination of all of this has served to consistently depress growth below the growth rate of…
Macro View A meeting between Euro-area finance ministers, central bankers, and European Commission officials ended abruptly Monday, as a Greek government official said the Euro area’s recommendation to extend bailout conditions was unacceptable. Greece’s current aid package expires February 28, thus necessitating a new round of negotiations between Greece and its creditors. The newly-elected Greek government is seeking a new deal with easier terms. The cost of Greek debt and the cost for bondholders to insure against a Greek default has risen dramatically in recent months, suggesting real concern about the potential for some form of default. Monday’s failed negotiation…