Wednesday, April 25, 2018

Société Générale's Albert Edwards Says "My Reputation For Calling Stocks Is In Tatters"

Well duh. He's been stubbornly fighting the central banks for a decade, a trait he shared with fellow bear David Rosenberg until Rosie flipped a few years ago and caught the last 35% or so of the up move.
But it isn't for the equity calls that Albert gets paid, and they're not why pros still listen to him:
The House Fed has thwarted his House Stark at every turn.
Now he's getting ready to roll but it may be too late for him.
http://www.hollywoodreporter.com/sites/default/files/imagecache/list_landscape_960x541/2016/06/game_of_thrones_quotes_3_h_2016.jpeg
"I fought. I lost. Now I rest. But you, Lord Snow… you'll be fighting their battles forever."
Albert addressing another standing room only investment conference crowd

Last seen in "Société Générale's Albert Edwards: Winter Is Coming".

Albert's twenty-year bullishness on bonds and what declining yields tell us about the underlying economy is why SocGen keeps him around.

Here he is via ZeroHedge:
SocGen's permabear skeptic Albert Edwards is best known for one thing: predicting that the financial world will end in a deflationary singularity, one which will send yields in the US deep in the negative, and which he first dubbed two decades ago as the "Ice Age." He is also known for casually and periodically forecasting - as he did a few weeks ago in an interview with Barrons - that the S&P will suffer a historic crash, one which will send it back under the March 2009 low of 666.
In this context, a couple of recent events caught Edwards' attention.

First, speaking of the abovementioned Barron's interview, Edwards was taken aback by one commentator who took the SocGen strategist to task for his relentless bearishness. Indirectly responding to the reader, in his latest letter to clients Edwards writes that "it’s good to have a little humility in this business because it’s so darn humiliating when forecasts are proved wrong. And the bolder the forecast, the more humiliating it is!" He continues:
That is one reason why most commentators on the sell-side never stray too far from consensus. When I was an avid consumer of sell-side research some 30 years ago, there was one  thing about the macro sell-side that I truly marvelled at – namely the analysts’ ability to totally reverse a view and pretend that had been their view all along! In the days before the internet and email, I had to rifle through our storage cupboards to find the evidence of what were often 180 degree handbrake turns. In the internet age, there is no hiding any more. 
One of the most levelling experiences at the end of an article or interview about my thoughts is to scroll down and read some of the readers’ comments. In my case, they often marvel that I am still in any sort of employment at all! Some are witty and make me smile -– like the one below in response to a recent interview I did with Barron’s.
Edwards refers to the comment titled "‘Prescient as a Broken Clock?" authored by one Gordon Gould from Boulder, Colorado who writes:
“Barron’s notes that Société Générale’s Albert Edwards is a permabear (“S&P 500 Could Still Test 2009 Lows,” Interview, April 7). However, your readers would surely like to know how some of his previous calls have turned out. A quick Google search revealed that nearly five years ago, Edwards called for the Standard & Poor’s 500 index to hit 450 and gold to exceed $10,000. While even a broken clock is correct twice a day, perhaps in Edwards’ case, we’re talking about a broken calendar on Saturn, which takes about 29 years to orbit the sun.”
Albert summarizes his response to this comment eloquently, using just one word: "ouch." Hit to his pride aside, Albert asks rhetorically "Where did it all go so wrong?" and explains that in the Barron’s interview, "I explain why in my Ice Age thesis I still expect US equity prices to fall to new lows in the next recession." To be sure, this is familiar to ZH readers, as we highlight every incremental piece from Edwards, because no matter if one agrees or disagrees, he always provides the factual backing to justify his outlook, gloomy as it may be....MUCH MORE 
Over the years we've had some fun at Albert's expense. As noted in a 2017 post:

Every time I am asked why we post on Mr. Edwards "when he's been wrong so often" I debate whether to explain or just give a glib answer.
The flippant rationale would be we get to go with headlines such as:

Société Générale's Albert Edwards Descends Into A Nightmare World of Dream Demons and Market Depravity
Société Générale's Albert Edwards: "Many Think I am Mad..."  
Société Générale's Albert Edwards Sees Blue Skies, Sunshine, the Lame Shall Walk Again
Of course it's possible I have misinterpreted the meaning of 
"the US economy is on crutches, and they are about to be kicked away"
Société Générale's Albert Edwards Has Some Troubling News He Reluctantly Shares
Société Générale's Albert Edwards Not His Usual Jolly Self (II)
Société Générale's Albert Edwards: "I Have Been Wrong – I’ve Been Too Bullish"
It May Be Time To Put Société Générale's Albert Edwards On Suicide Watch
Société Générale's Albert Edwards: Cry Havoc and Let Slip the...Ah Screw it

And many, many more.
The straight-up answer is: I can't think of anyone else who nailed the deflationary bias in credit markets as well as he has for as long as he has, pretty much the last 15-20 years.
And as far as equities go, absent the extraordinary measures of the world's central banks the landscape would look very, very different.

The biggest criticism you can lay on the guy is he didn't realize what he was up against re: the powers that be.
Plus that whole Albert-in-the-bathtub period was just stupid.
You do have to be careful you don't personally get into a David Koresh/Jim Jones-Drink-the-Kool-Aid frame of mind when gazing upon the dark side, whether Albert or Ambrose Evans-Pritchard or Jim Chanos. I mean it's okay to play around with melancholy:

Music For Albert Edwards. On A Cold Day. In February
In F flat minor.* 
And it's raining.
Season's Greetings From Société Générale's Albert Edwards (Nov. 14, 2012)
 Expect the New Year to bring nothing but disappointment....


But be attuned to when to take Mr. Edwards with utmost seriousness. 
From:
UPDATED *****Alert***** Société Générale's Albert Edwards Bearish *****Alert***** (Sept. 6, 2011)
We passed a three year anniversary yesterday.
On September 5, 2008 we posted "Meltdown"-Société Générale" which linked to Albert's research note of a couple days earlier:

***Alert****Economic and equity market meltdown imminent****Alert***

A good call.

On September 7, 2008 Fannie Mae and Freddie Mac were placed into conservatorship.
On September 14, 2008 Merrill Lynch agreed to be acquired by Bank of America to avoid a Reg. T shut-down when markets re-opened.
On September 15 Lehman filed their bankruptcy petition.
On September 16 AIG became a 79.9% subsidiary of the U.S. Treasury.

Within 10 more days the Nation's largest thrift, WaMu was seized and five days later Wachovia gobbled up.

Good times, good times.

So take what you can use and make dumb headlines with the rest