Tag: Albert Edwards

QUOTES OF THE DAY

“What does Dr Copper want to tell us? The metal with the PhD in economics is now in a bear market, down 21% from recent high in June. Dr. Copper is signaling us that global contraction is now in motion.”

Dr. Harald Malmgren

“Make no mistake, whatever the macro-idiosyncrasies of Turkey, the key to the current turmoil that is spreading into EM generally, is Fed tightening and the strong dollar. As we have repeated ad infinitum, since 1950 there have been 13 Fed tightening cycles, 10 of them ended in recession and the others usually saw the EM blow up – such as the 1994 collapse in the Mexican peso. The Fed always tightens until something breaks.”

Albert Edwards

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GREY CHAMPION ASSUMES COMMAND (PART TWO)

In Part One of this article I discussed the arrival of Grey Champions in previous Fourth Turnings; their attributes, deficiencies, and leadership skills; and why Donald Trump is the Grey Champion of this Fourth Turning – whether you like it or not. Now I will try to make sense of what could happen next.

“Our movement is about replacing a failed and corrupt political establishment with a new government controlled by you, the American people. The establishment has trillions of dollars at stake in this election. For those who control the levers of power in Washington and for the global special interests, they partner with these people that don’t have your good in mind. The political establishment that is trying to stop us is the same group responsible for our disastrous trade deals, massive illegal immigration and economic and foreign policies that have bled our country dry.

It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities. The only thing that can stop this corrupt machine is you. The only force strong enough to save our country is us. The only people brave enough to vote out this corrupt establishment is you, the American people.” – Donald Trump

Seventy year old Donald Trump has assumed the Grey Champion flagstaff. In an increasingly chaotic world, normal working class Americans in flyover country were seeking a leader who could bring order, defeat the corrupt establishment, make tough decisions, and capture the zeitgeist of this moment in history. The ruling elite oligarchs and their fawning minions, occupying their strongholds in New York, California, Illinois, and D.C., are infuriated the peasants have dared to resist. In their secretive secure spaces, the elites are plotting with one purpose in mind – this uprising must be quelled.

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A Recession Is Imminent, According To Albert Edwards

Via Benzinga

A Recession Is Imminent, According To Albert Edwards

Albert Edwards of SocGen (Societe Generale SA (ADR) SCGLY 5.88% has held a bearish view for quite some time and on Friday released a new note to clients, which is merely a follow-up from previous bearish reports.

Edwards said in early January that the S&P 500 index could collapse by 75 percent to the 550 level. He followed up in April by saying that a “tidal wave” of corporate default is looming and this will propel the US into a recession.

Related Link: SocGen: Recession Is “Virtually Inevitable”

As far back as 2013, Edwards predicted that the price of gold will surge to $10,000 an ounce, the S&P 500 index will bottom at around the 450 level and 10-year U.S. Treasury yields will trade at sub-1 percent.

Why Is This Time Different?

“In the aftermath of the latest, weaker than expected, nonfarm payroll data, economists are certainly more worried,” Business Insider quoted Edwards as saying in his latest research note. “The excellent folks at Advisor Perspectives highlight the Fed’s Labour Market Conditions Index as suggesting a recession is imminent (the cumulative peak is an average of nine months ahead of the start of recession and we are now four months beyond a peak.”

Edwards has been expecting an “Ice Age” for stocks since 2013, which would consist of a multi-decade downturn for stocks and financial assets. The “Ice Age” is also characterized by “lower lows and lower highs for nominal economic quantities,” driving a “re-rating of government bonds and the de-rating of equities.”

“The secular bear market only ends when cyclically adjusted valuation measures reach rock bottom (such as the Shiller PE on the bottom line),” he added in his note. “Each successive recession sees huge downturns, usually to new lower lows of both prices and valuations. That is why we reiterated our view early this year that in the coming recession the S&P will bottom at 550, a 75 percent decline from current levels.”

Bottom line, the equity market is heading into a “cold, dark, and damp” space, and only time will tell how accurate his forecast is.


Albert Edwards: “Let Me Tell You How This All Ends”

Tyler Durden's picture

Submitted by Tyler Durden on 05/08/2016 14:00 -0400

The dollar’s recent rapid slide has been accompanied by a constant backdrop of dovish cooing from the Fed. Until this week, SocGen’s Albert Edwards notes that both equity and commodity markets had embraced the weak dollar as the elixir to solve all their ills. That relief, however, has now proved fleeting as fear of weak economic activity has reasserted its influence on investors. The weak dollar, Edwards warns, should be seen as merely a shuffling of deckchairs on the Titanic before the global economy sinks below the icy waves.

Risk assets are once again refocusing on the increasingly dismal prospects for global growth rather than the short-term relief of dollar weakness, according to SocGen’s inimitable Albert Edwards. The US remains the main concern, although the rapid unravelling of Abenomics in Japan and a likely imminent tightening of monetary policy in China to snuff out yet another housing bubble in the major cities also feature high on investors’ worry list.

But it is in the US that growth concerns remain most intense, with renewed weakness in the manufacturing ISM as we move into Q2 following on from the moribund 0.5% qoq Q1 GDP outturn. Yet there was some optimism around after the GDP release that non-farm businesses inventories have risen at a slower pace  ie only $61bn in Q1 2016 against $87bn in Q4 2015 and a much faster $110bn pace in H1 2015. The slower pace of increase means that non-farm inventories have been a drag on GDP for three successive quarters, deducting an annualised 0.22% from Q1 GDP (and 0.12% and 0.8% in the two previous quarters). If you think that means that the inventory problem is solved though, think again. It’s not the level of inventories that are the problem, but the level relative to sales which are at heights normally seen preceding or at the depths of recession (see chart below).

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Albert Edwards Finally Blows Up: “I’m Not Really Sure How Much More Of This I Can Take”

Tyler Durden's picture

Submitted by Tyler Durden on 04/22/2016 20:17 -0400

Earlier this week we described the personal come to non-GAAP Jesus moment of trading commentator Richard Breslow, who confessed in no uncertain terms that he has had it with endless central banking intervention: “a portfolio built to only withstand stress thanks to central bank intervention is one destined to blow-up spectacularly. The embedded flaw in this new logic is that central banks give investors perfect foresight. And nothing can go wrong… You don’t need to be a Taleb or Mandelbrot to calculate that we have been having once in a hundred year events on a regular basis for the last thirty years.”

Today it is another famous skeptic, SocGen’s Albert Edwards who has had enough and says he feels “utterly depressed” because  he has not “one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions and that political chaos will be the ugly result. The only people who will benefit are not investors, but anarchists who will embrace with delight the resulting chaos these policies will bring!”

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