"Investors cannot move for the weight of broker research comparing the current conjuncture in the US with Japan a decade ago. While bond markets at least, move to discount deflation, most sell-side analysts still say the current situation is unlike Japan a decade ago. They are right. Things now in the US are much, much worse than Japan a decade ago."
"Equity investors are in for a rude shock. The global economy is sliding back into recession and they are still not even aware that these events will trigger another leg down in valuations, the third major bear market since the equity valuation bubble burst."
"This lack of awareness reminds me of reports this week that a 35 year old Polish man hadn't noticed for five years that he had a bullet lodged in his head. Like the equity market in 2000, the Polish man had been partying too hard to notice that he had been shot. The BBC report the police as saying “He told us he remembered having a sore head, but that he wasn’t really one for going to the doctor.”
"As the equity bloodbath of the last decade enters its final, even bloodier phase, investors continued optimism also reminds me of the Black Knight in Monty Python & the Holy Grail. Despite being grievously wounded by King Arthur, the Black Knight makes light of his injuries which he dismisses as a flesh wound. The vast bulk of the investment industry fails to appreciate that we are locked in a structural bear market and about to enter Act III."OK, enough, I think you got it. This Natural Born Bear at least is funny, definitely more than Roubini who predicted that US growth will be "well below" 1 percent in the third quarter (tomorrow) and put the odds of a double dip at 40 percent... I'd agree on the view that those guys, perpetually bear, are like a broken clock, right twice a day (out of the 86,400 seconds of a day). As they are always bearish, they become popular and have their hour of glory when there are consequent drops that inevitably occur from time to time and the market mood turns into "fear" mode... OK, they were "right" and "predicted" the global financial crisis, fair enough, they then wrote best-selling books, appear frequently on TV, I guess their sexual life improved dramatically with the crisis and I'm pretty sure Hollywood is preparing a couple of movies starring Brad Pitt as Roubini. It has become their bread and butter to predict the apocalypse for tomorrow but if you listen to them to take your trading decisions, I seriously doubt you would still be alive. How many losses on short positions and missed opportunities they led to? My point is I don't think that a "perpetual" short position makes any sense and to be frank, some days I even wonder whether a short position makes sense or not : when you're bearish, just go cash and wait to be bull to come back to the markets, at a discounted price if you were initially right. Everytime I argue this to a Fellow Trader I'm told : "but for instance guys who were short in 2008..." I know, I know...I don't tell never to be bear : believe me or not but during my young days, I myself brought to my dear employer hundreds of millions on short positions in 2008 (the slice of the cake I got for that did that I'm now trying to do it again but this time for myself... "You know Sauros, it's the crisis and the Bank has lost a lot more than that..."). In my modest experience, you don't have to be Bear all the time, Bear before the crashes will do.
TLofT be with You.
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FYI As this post is published: SPX 1053 // SX5E 2607 // NKY 8906 // DAX : 5912 // EURUSD 1.2693 // USDJPY 84.61 // XAUUSD : 1239
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