While the latest European Union (EU) framework for addressing the European Monetary Union’s (EMU or eurozone) government debt crisis should buy more time, it does not solve the underlying problems.
As a condition of the agreement, signatories agreed to consolidated oversight of national governments’ finances. But additional fiscal austerity in the near-term could exacerbate what appears to be a nascent recession in the eurozone.
The summit exposed some interesting political rifts, but we believe that current speculation on the euro’s inevitable demise is overdone.
For the entire commentary click here (4 pages)
As the year winds down we’re feeling the contagion of the euro issues in our markets with high correlation among asset classes. Follow the link for SEI’s Weekly Market Update through last Friday December 9th. Our usual optimism for a positive finish to 2011 is quickly evaporating. We take some comfort in the heavy allocation in our strategies to non-correlated absolute return funds.