The latest from Mr. Edwards at Blomberg:
The two-week retreat in global equities may turn into a “rout” after a measure of so-called leading indicators fell, signaling the economic recovery may be peaking, according to Societe Generale SA’s Albert Edwards.
An Economic Cycle Research Institute gauge of the U.S. economic outlook slipped to 27.2 in the week ended Oct. 16 from 27.8 the previous week, the first drop since March, according to Bloomberg data. The decline is “tentative evidence” that the economy’s rebound is near a peak, Edwards, a global strategist at Societe Generale in London, wrote in a research report today.
“They say the trend is your friend until it hits a bend,” Edwards wrote. “Beware, we may have just hit one.”
The MSCI AC World Index of stocks in developed and emerging nations has dropped for eight straight days, the longest losing streak since July 2008. The index had rallied as much as 73 percent from this year’s low on March 9 as investors speculated more than $2 trillion in global government stimulus would lift the world economy from its first recession since World War II.
Edwards said equities may mirror changes in the economic cycle, citing patterns seen during the “structural” bear market in Japanese stocks in the 1990s. Declines in Japan’s leading indicators during that period provided sell signals for equities, he wrote.
“I remain convinced we are still in a structural bear market and that this economic recovery rests on such shallow foundations that it will be washed away by the first moderate wave,” Edwards wrote....MORE
*Here's a smattering of our favs from Albert:
September 5, 2008, ten days before Lehman failed, AIG became a wholly owned sub. of the U.S. Treasury, WaMu etc.: ""Meltdown"-Société Générale":
June 4, 2009: "Société Générale's Albert Edwards, über Bull"
October 7, 2009: "Climateer Line of the Day (Société Générale's Albert Edwards edition)":
“Investors think this is a sweet spot, but it is in fact a putrid boil that has not been properly lanced”
Here are some of our links to Ambrose the morose.
We have only one post on Mr. Rosenberg.