Thursday, June 4, 2009

Société Générale's Albert Edwards, über Bull

Updates June 19: "More on "Société Générale's Albert Edwards "New Stockmarket Lows 2nd half of 2009"'
Original post:
I added the umlaut for emphasis.*
The last time we checked in with Mr. Edwards (March 19) he was being tortured by the rally that began March 9:

David Gaffen has it at MarketBeat:

...“With every bear market rally, the pressure mounts on trenchant bears such as I am to turn bullish,” writes Albert Edwards, strategist at Societe Generale. “Like all bear market rallies, the same old clap-trap is wheeled out about the market pre-empting recovery 6-9 months ahead and valuations being too cheap to ignore. It would be wrong to say I do not agonize that I might not be missing a turn.
I’m riddled with self-doubt.”
From FT Alphaville:

There is much hope out there that the current moderation of recessionary forces is a prelude to recovery. I believe that the current market situation is like late 2001/early 2002. Any relapse in activity will cause a catastrophic loss of confidence.

Investors simply did not give up hope when the S&P visited 666 last month. Where was the universal excess bearishness that typically marks the end of major bear markets? I sense there is a lot of hope out there that this is the real thing. But before I can go overweight equities, I need not just cheap valuations, I need to see despair and revulsion.

In my view it is still too early to go bullish. But for those readers who disagree, I would certainly caution piling in with technical indicators so very overbought (see left hand chart below). But I still believe that the worst of the bear market still lies ahead.

4 June, 2009. Global Strategy Weekly, Societe Generale, Albert Edwards:

I wasn’t going to write this week. As I am sure you know, most accidents happen in the home and washing dishes is dangerous. The font of all my weeklies, my index finger, suffered a major injury. After doing the washing-up, I failed to spot the large shard of broken glass lying in wait. I found it when trying to force some homeless peas down the plug hole. Hence tapping out the weekly with my index finger is doubly painful this week. As well as the physical laceration, I have to report that one of the most reliable indicators of an equity bull market, the Coppock Indicator, has just delivered a massive equity buy signal (more on that later). Of course, this would not be a problem if I were not still underweight equities…

For the record, and following Gillian Tett’s declaration that the recovery might take the shape of the Pitman shorthand for “bank” (something like a sickle), Edwards has been delving into his ethnic past to find the possible shape of things to come - an Armenian K:



Which brings to mind his comment last June: "Société Générale: “We see a y-shaped global recession. We are going down before looping backwards”"

See also:
People I Listen To: "Albert Edwards: Back in the bear camp"
*From America's Finest News Source:

Ünited Stätes Toughens Image With Umlauts

WASHINGTON, DC—In a move designed to make the United States seem more "bad-assed and scary in a quasi-heavy-metal manner," Congress officially changed the nation's name to the Ünited Stätes of Ämerica Monday.

"Much like Mötley Crüe and Motörhead, the Ünited Stätes is not to be messed with," said Sen. James Inhofe (R-OK). An upcoming redesign of the Ämerican flag will feature the new name in burnished silver wrought in a jagged, gothic font and bolted to a black background. A new national anthem is also in the works by composer Glenn Danzig, tentatively titled "Howl Of The She-Demon."