Tensions in Europe have fallen since late July, after the European Central Bank (ECB) announced new measures to support struggling European states on bailout programs. Investors have flooded back into Europe with a vengeance since, buying up bonds of struggling countries and companies and seizing on positive news. Today, the news that Germany is open to Spain’s seeking a precautionary credit line on top of a bank bailout from the Eureopean rescue fund pushed stocks higher.
But Goldman Sachs chief financial officer David Viniar scoffed at the change in attitude during the bank’s quarterly earnings call this morning, saying:
While activity [in Europe] might have picked up a little bit towards the end of the quarter, it was certainly not a very, very large increase at all. And second of all, the traders themselves have to be more comfortable that the market environments are being driven by economics as opposed to by politics; and I think maybe you’ve had a slight shift to that but not a big shift at all.
Goldman Sachs reported better than expected earnings per share during the third quarter, though its financial officers said it struggled to make the most of a challenging macroeconomic environment.