Morgan Stanley’s piece on Treasuries Priced for Perfection…for Now! is pretty bearish. The basic gist is that while the ten-year represents fair value today, because inflation expectations have become unanchored, Morgan Stanley expects the yield to rise from 3.3% to 5.5%. That’s a disaster of 1994 proportions. Obviously, given some of my recent comments, this [...]
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Morgan Stanley expects 10-year yields to rise 220 bps in 2010
Nov
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Meredith Whitney: “I haven’t been this bearish in a year”
Nov
Below is a CNBC video with Meredith Whitney in which she joins Nouriel Roubini on the doom and gloom parade. Over the summer, both Whitney and Roubini were fairly optimistic. In June I said:
Think of the consensus forecast as an anchor which restricts the outlook of any individual forecaster afraid of failing unconventionally.
In Roubini’s case [...]
Consumer confidence sinking
Nov
From Bloomberg:
Confidence among U.S. consumers unexpectedly dropped in November as the loss of jobs threatened to undermine the biggest part of the economy.
The Reuters/University of Michigan preliminary sentiment index decreased to a three-month low of 66 from 70.6 in October…
Rising joblessness puts the economy at risk of slipping into a vicious circle of firings [...]
295 views
Chanos says dump munis as distress mounts and ratings attacked
Nov
I have really started to dislike municipal bonds as an asset class. They have seen a huge rally along with almost every other financial asset but the underlying fundamentals are weak because of financial distress at states and municipalities.
Last week, I wrote a first piece on this topic, based on some work by Philip Greenspun [...]
1,823 views
Whitney Tilson: "A pullback of some sort is likely"
Nov
Tilson is saying what I have been saying, namely that March saw an increased number of attractive buys, but most of these are now fully priced. As a result, he is selling equities – even building up his net short positions.
Unlike bear turned bull Richard Bernstein, Tilson says that after a huge 60%+ run [...]
The collapse of commercial real estate
Nov
The long-coming commercial real estate bust has arrived in the U.S. and elsewhere, a result of sky-high prices met by a severe downturn. Prices could only work in a best-case economic scenario and large busts are now coming (see my posts on Stuyvesant Town and Capmark Financial).
This bust is certainly another major impediment to [...]
Wood warns of correction, says “key variable in the West is government policy”
Nov
Christopher Wood, the well-noted market strategist at CLSA and writer of the classic Japan crash warning book “The Bubble Economy,” is now warning of a market correction in the West. According to CNBC India, Wood believes that the markets’ extreme upward move is increasing the chances of a major correction.
Wood is still cautious. He says [...]
255 views
Jeremy Grantham: The market is 25% overvalued; 15% correction coming
Oct
Jeremy Grantham is out with his much anticipated Quarterly Letter and it’s a good one. “Just Deserts and Markets Being Silly Again” is a cutting, snarling, and sarcastic rejection of the prevailing V-shaped recovery bull market view. But Grantham is far from ultra-bearish, giving a more nuanced and realistic assessment for the medium and longer-term.
He [...]
4,309 views
Picture of the day: Cat chases bear
Oct
This photo from Yves Smith’s antidote du jour was too good to pass up. You can think of the cat as the recovery stalking its prey and the bear as, well, a bear. The cat looks pretty tame though. Let’s hope this bear doesn’t come right back down and maul it.
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Household debt as an indicator of secular bull and bear markets
Oct
In my last post, I presented you with a bunch of data on debt levels broken down by sector of the economy (see “A brief look at the Asset-Based Economy at economic turns”). I found it interesting that a secular pattern seemed to be at play when looking at the household debt charts.
Notice the three [...]
706 views
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