Reply #20: europe:Bailouts provide liquidity but do not address structural issues in Eurozone:

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http://economictimes.indiatimes.com/opinion/interviews/bailouts-provide-liquidity-but-do-not-address-structural-issues-in-eurozone-charles-stucke-guggenheim-partners/articleshow/10182593.cms

Bailouts provide liquidity but do not address structural issues in Eurozone: Charles Stucke, Guggenheim Partners

n an interview with ET Now, Charles Stucke, Sr Managing Director, Guggenheim Partners, gave his views on global markets and Euro zone crisis. Excerpts:

ET Now: Europe and US have been rallying after the German vote, does it seem like this equity rally can last and if so for how long?

Charles Stucke: In terms of an equity rally, medium term and long term are quite bullish on equity markets. If you look both globally and in particular US equity markets, you will find that PEs related to interest rates are at or near all time lows that provide the strong foundation for support for rallies in equity markets. However we do think that in the near term, volatility will persist if the global economic data provides greater clarity.

ET Now: What is the road ahead? Now the Germany's parliament has approved new powers for the Eurozone's rescue fund and do you think IMF and EU will agree upon additional tranche of aid for Greece now?

Charles Stucke: In terms of the situation in Greece and the European banking situation, our primary concerns are with both the French and German banks. We believe that bailouts provide liquidity but do not address structural issues. We think that the structural issues are going to persist in Europe for sometime now and when we look at the action of governments and regulators in this environment, we think that actions are going to pivot the focus more on shoring up the balance sheets of the French and German banks than on addressing the solvency of sovereign Greek debt.