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Bob "The Skeptical Strategist" Janjuah Expects A 10% Market Correction

Tyler Durden's picture


Bob Janjuah was interviewed by Bloomberg TV's Erik Schatzker earlier in which the famous former RBS and now Nomura contrarian who predicted the 2008 crash shares his "skeptically strategic" and tactical outlook on the market: in a nutshell he joins technicians such as Tom DeMark in calling for a 10% correction in the market. Among the three key themes underlying his skeptical views are the following: i) Asia slow down (hard or soft) which will have implications on US markets; ii) Is Europe closer to the endgame; and iii) the US recovery, and the question of how sustainable it is especially following the elimination of the ES boost courtesy of now-daily POMO operations. In terms of asset allocations, Janjuah believes that a reallocation out of EM and into DM makes sense (time for reverse reverse decoupling already?). And just to clarify what Bob's personal position is, for those who may have missed his last two years of letters and memos, he says "I think we are going to have a deeper and harder slowdown in Asia, I think the European situation is closer to the endgame, my biggest doubt is on the US recovery...I think in Q2 and Q3 the grow slowly weakens, and much like last year we are going to be looking for QE3, and my concern is that the hurdle rate for further policy, fiscal and monetary, is much much higher."

As for the question of what Bob sees the biggest beta driver in the world right now, the EUR doing in the future (with the entire market trading in lockstep with the European currency), he gives a very pragmatic answer: "The Euro will either be the next reserve currency... or it won't." His personal view: "I am more optimistic today than I was two months ago."

Lastly, now that everyone seems to have awoken and realized that the only reason the stock market is where it is is due to the Fed's intervention in capital markets, Bob says that absent QE2, the S&P would have ended 2010 "closer to 1,000 than 1,200." Then go ahead and back out QE Lite, and QE 1, and what does one get.... As Schtazker points out: "Effectively the Fed was the bid. If the Fed's hadn't been in the market, flooding investors with liquidity giving them cash to buy risk assets, the S&P would have declined." Finally people get how central planning works...

In terms of biggest risks, Janjuah says the i) "melt up" is the biggest risk, becase "we are building a bubble"; ii) jobs in the US are number two (one more month... just one more month we promise and we will have jobs growth... ignore all the other 18 consecutive months this has been said before), and iii) is the bond bull market over - when do rising bond yields negate and reverse the "Tepper" trade?

Much more in the full interview.


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Mon, 01/24/2011 - 12:10 | 898853 bonddude
bonddude's picture

Barack Obama on bank fraud.

Mon, 01/24/2011 - 12:21 | 898902 bonddude
Mon, 01/24/2011 - 13:16 | 899090 Hedgetard55
Hedgetard55's picture

Hawaii Gov could not find a birth certificate for Barry.

Army LCOL remains in jail for doubting Obama's citizenship. What happens if he turns out to be correct?


Mon, 01/24/2011 - 15:00 | 899515 weinerdog43
weinerdog43's picture

Who cares.

Mon, 01/24/2011 - 12:13 | 898864 Gaston
Gaston's picture

Hard to think.... With the Fed pumping the ES (S&P 500 futures) with an endless supply of fiat dollars..... I dont see it happening, and 10%????? thats being way to modest.... try 15%.....

I think were going to break out of 1300 this week.... This is it.... Next time this market goes down, God help us.... I think the next big catalyst will be GG.....

Mon, 01/24/2011 - 12:21 | 898905 plocequ1
plocequ1's picture

This is just one man with one opinion that tries to show off  his Harvard  degree in economics. The fed will keep the market going to the moon. Im a dumb fuck with no Degree and no charts. I am nothing. It really doesn't take much to figure it out. Just common sense.

Mon, 01/24/2011 - 13:11 | 899077 SheepDog-One
SheepDog-One's picture


Mon, 01/24/2011 - 13:31 | 899145 Gaston
Gaston's picture

Good Game...

Mon, 01/24/2011 - 13:56 | 899226 SheepDog-One
SheepDog-One's picture

Well it certainly will be interesting watching everyone running around like chickens with their heads cut off again, whenever 'it' happens some morning, or overnite when Asia market peg low and stay there.

Mon, 01/24/2011 - 12:13 | 898866 RobotTrader
RobotTrader's picture

I wish these guys would stop coming out and predicting mini-crashes, flash crashes, corrections, etc.

Then the market would have a fighting chance of going down.

But with so many predicting it, the market keeps skying higher and higher.

Mon, 01/24/2011 - 12:27 | 898918 plocequ1
plocequ1's picture

Im with you. Its getting annoying. Blah, Blah Blah. Dow up 72. Blah..

Mon, 01/24/2011 - 13:15 | 899087 SheepDog-One
SheepDog-One's picture

Everyone slowly capitulating and easing into the 'dont fight the FED, DOW 20,000 comin soon' trade, the more it tells me all will be wiped out in an instant. Dance with the devil all nite, but dont come crying when you get 3rd degree burns, you should have known better.

Mon, 01/24/2011 - 14:24 | 899366 Minyan Vince
Minyan Vince's picture

I very much concur RT...we'll see, there are a lot of exhaustion warning signs out there but who knows with everyone expecting it

Mon, 01/24/2011 - 12:13 | 898867 JW n FL
JW n FL's picture

buy the new lows in europe... is what this means. for anyone who is confused...

Mon, 01/24/2011 - 12:19 | 898890 Sudden Debt
Sudden Debt's picture

I'm from Europe and let me tell you: YOU HAVE TO BE NUTS TO BUY EURO STOCKS. They are WAY overpriced and move like shit.

Mon, 01/24/2011 - 12:26 | 898930 JW n FL
JW n FL's picture

sorry... the euro, as in euro the dollar euro...

Mon, 01/24/2011 - 12:15 | 898875 Agent P
Agent P's picture

Calling for a 10% correction after the run we've had isn't exactly going out on a limb.

Mon, 01/24/2011 - 12:19 | 898894 JW n FL
JW n FL's picture

at which point, do you think? the circut breakers will let it go any lower?

Mon, 01/24/2011 - 13:10 | 899073 SheepDog-One
SheepDog-One's picture

He's going out on a limb 24 inches in diameter and 2 feet off the ground here.

Mon, 01/24/2011 - 12:15 | 898876 RobotTrader
RobotTrader's picture

Here is what I'm talking about.

Lots of top picking going on today.

Mon, 01/24/2011 - 12:45 | 898983 alien-IQ
alien-IQ's picture

the market is just trading tick for tick with the dollar decline. there is no other mystery to this and no point in trying to invent one. how many times have we seen this already?: every time the market looks weak, shank the dollar. problem solved...of course, every solution breads a new problem...but the bernank does not care about the problems of the many only the wealth of the few.

welcome to Amerika.

Mon, 01/24/2011 - 12:17 | 898880 Prof Gulliver
Prof Gulliver's picture

These "strategists" have been calling for 10 percent corrections every week since Dow hit 10K in August. It's up a relentless 20 percent since. When the Dow hits 20K, Janjuah and the rest will still call for a 10 percent correction. And when the Dow falls from 20K to 18K, they'll all heap praise on themselves for their great "strategic" predictions. Bunch of useless fools, every one of them. 

Mon, 01/24/2011 - 12:20 | 898895 JW n FL
JW n FL's picture

I am not them.

Mon, 01/24/2011 - 12:20 | 898897 JW n FL
JW n FL's picture

1,100 isnt 10% either...

Mon, 01/24/2011 - 16:04 | 899776 LowProfile
LowProfile's picture

Janjuah did?


Mon, 01/24/2011 - 12:17 | 898881 RobotTrader
RobotTrader's picture

Another thing.

Guess what the two best performing groups are in 2011?

Solar stocks and PIIGS banks.  Yep the absolute "worst of the worst" is on fire.

And the worst performer is metals and mining.

Seems like if the market were to go down, the worst sectors would be underperforming.

Mon, 01/24/2011 - 12:23 | 898914 blackbox
blackbox's picture

GS added FSLR to conviction buy list hence solars on fire today (and GS selling into it)

Mon, 01/24/2011 - 12:26 | 898933 thepigman
thepigman's picture

Those are the only places that anyone's

short, Robo

Mon, 01/24/2011 - 12:29 | 898941 Cdad
Cdad's picture


Either you are being disingenuous, or you don't know what you are talking about.  The Worst of the Worst stocks rally last...on short covering.  This usually marks the end of a rally.  And I add "usually" only because of Banana Ben Bernanke...otherwise I would say this marks the end of a rally.


Mon, 01/24/2011 - 12:39 | 898966 alter ego
alter ego's picture

Robo works for the Big Squid or maybe he is a

little misguided, or he can't see reality.

I think he should read Taleb's black swan and I

say this because he fits in the type of guy who

acts like the "turkey" instead of the "butcher".

He will find that reality is going to destroy all

those sand castle's portfolio built on Fed's

quantitative easing.

I rather hold my gains and loose a little bit

everyday and win big when the s.. hits the fan

instead that winning everyday and one day

loose it all.


Mon, 01/24/2011 - 12:48 | 898990 SheepDog-One
SheepDog-One's picture

Comical how everyone already has 2011 in the bag, 'All is well until maybe Q3, where we might get a 10% "correction", yea whatever my ass show me the correction, these guys are all full of crap and 'going out on a limb' thats only 2 feet off the ground and 24 inches in diameter. And BTW 10% aint SHIT!

Mon, 01/24/2011 - 13:18 | 899098 lieutenantjohnchard
lieutenantjohnchard's picture

cdad, robo is like a sperm whale spouting in the ocean. he has no idea what he believes, nor is he consistent from post to post. i've read him for some time. he's all of 30% invested, scared to death he'll lose money even as he mocks bears. last week he was a pm bull, bear and bull again in successive posts. amazingly, there are folks here that actually believe him wise.

Mon, 01/24/2011 - 14:06 | 899288 Spitzer
Spitzer's picture

I think the point Robo is trying to get across is that the market is one big fucked up unpredictable mess.

thats what i gather

Mon, 01/24/2011 - 16:06 | 899782 equity_momo
equity_momo's picture

Not true.  Sounds like late cycle rotation. When the quality names are lagging and the junk is being bought in the search for yield "buy the dog" mentaility , you know youre close to the top.

Theres alot of stealth distribution going on. If you look beyond the cookie cutter charts you will see it.

Mon, 01/24/2011 - 12:18 | 898885 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

"and much like last year we are going to be looking for QE3, and my concern is that the hurdle rate for further policy, fiscal and monetary, is much much higher."

How can there be any doubt?The Fed runs the show now,congress are mere bit players.They recently announced their plan to avoid going bust - just transfer the losses to the Treasury i.e the US taxpayer,so no matter how infinitessimally huge the losses get they won't be liable,apart from a few obscure web sites and ZH this did not get any main stream media coverage,and even if it did most sheeple would not even be able to grasp the significance of it. 

As this entire mess unfolds,the actions of the Fed become bolder and bolder,as each policy move or announcement is now made,it is seemingly greeted with an increasingly depressed atmosphere of fatalism.Nobody even queastions their actions anymore..QEX coming as and when required.

Mon, 01/24/2011 - 12:18 | 898886 buzzsaw99
buzzsaw99's picture

Captain Effing Obvious.

Mon, 01/24/2011 - 12:18 | 898887 Horatio Beanblower
Horatio Beanblower's picture

Hard to believe?


"A Co Monaghan (that's in Ireland, for the uninitiated) shopkeeper - who had never before been involved in property development - was given a loan of €32m to build a shopping centre, the Commercial Court has heard.

The Commercial Court heard that Zurich Bank is seeking the repayment of the money from Jim McConnon of Main Street in Castleblayney Co Monaghan.

The court heard that Mr McConnon built Castleblayney Shopping Centre, but has had difficulty letting all the units in the centre and could not repay the money."


The Austrian Business Cycle Theory springs to mind.

Mon, 01/24/2011 - 12:21 | 898901 Dr. Porkchop
Dr. Porkchop's picture

"..I think in Q2 and Q3 the grow slowly weakens,..."

That should be QE2 and QE3

Mon, 01/24/2011 - 12:24 | 898921 cougar_w
cougar_w's picture

Good catch. They will overlap almost perfectly.

Mon, 01/24/2011 - 12:22 | 898910 Gaston
Gaston's picture check it out, APMEX SELLING 100 OUNCE JOHNSON MATTHEY BARS FOR 1 cent an ounce over spot..... LOL, I think they have a glitch on their site.....

Mon, 01/24/2011 - 12:23 | 898915 cougar_w
cougar_w's picture

10% correction huh? So he's going to BTFD at that point? I wanna see that.

Mon, 01/24/2011 - 12:24 | 898920 Oh regional Indian
Oh regional Indian's picture

Jan Hoohah!
Feb Oh nose!
Mar The Ides Bite! Ouch!
APR Going sky high.

In flames. I think Da Bears are too afraid to really call it, having been wronged by the FED every time they wake up a bit.

Someone made a great comment on my blog, bears repeating:

I detest any comment like “bears have to get going”. Bears can only use gravity, not rocket launchers.


Mon, 01/24/2011 - 12:25 | 898922 pat53
pat53's picture

This is EXACTLY why the markets will keep going higher. Air waves and press are filled to the brim with morons calling for an immediate and sharp correction.... see you at SPX 1350 in a few months ... LOL

Mon, 01/24/2011 - 12:58 | 899030 SheepDog-One
SheepDog-One's picture

A 'sharp correction' is 10% in a 40% overvalued market? Thats nothing but bullshit...there wont be any 10% correction there will be a total blowout of markets when the shit hits then fan suddenly 1 morning and no one will be abe to do anything about it! As soon as all the suckers are onboard that they can get, theyll pull the rug out leaving all the bagholders sucking paddy water. And I see that time as near, look around even all the bears are saying this just goes on forever, 100 points on the DOW daily to infinity as the bears all capitulate and say 'may as well join em if you cant beat em'...time draws near.

Mon, 01/24/2011 - 13:15 | 899089 pat53
pat53's picture

LOL, this is the same bullshit you were spewing at SPX 1050, when I told you it was going to 1100, and then at 1100 when I told you it was going to 1150, and then at 1150 when I told you it was going to 1200.....etc, etc,   Bottom line, is that you and all the doomers have been obliterated trying to fight the FED, instead of making money riding along. If you're that stupid you deserve to lose everything. WAKE UP ... LOL

Mon, 01/24/2011 - 14:02 | 899244 SheepDog-One
SheepDog-One's picture

OH told me all that...problem is since you 'schooled me'  with all your FED wisdom Ive been putting it all into my farm land and more livestock which is up WAY more than your BS stocks. Good luck with your stocks which will be wiped completely out one morning soon genius.

Mon, 01/24/2011 - 14:08 | 899297 Spitzer
Spitzer's picture



Mon, 01/24/2011 - 12:25 | 898924 scratch_and_sniff
scratch_and_sniff's picture

If he keeps saying Europe is closer to the endgame, he just might be right one he's shitting himself incase the big cuddly bear Gerry Adam's gets in, that's too funny. Get the Shinners in and lets default this bitch!

Mon, 01/24/2011 - 12:25 | 898927 Xibalba
Xibalba's picture

The Treasury, achem...I mean the Fed, will never let that happen.  No matter what. 

Mon, 01/24/2011 - 12:26 | 898935 RobotTrader
RobotTrader's picture

Here's one case for the bears.

Speculation in penny stocks is rampant today.

Check out Fannie Mae:

Mon, 01/24/2011 - 12:30 | 898943 papaswamp
papaswamp's picture

woooo the Fed just pumped $8.8 Billion into the market...rally on!

Mon, 01/24/2011 - 13:06 | 899060 blackbox
blackbox's picture

9x leverage = $88bn = IBM to $160 = $INDU to 12,000

Mon, 01/24/2011 - 12:34 | 898951 papaswamp
papaswamp's picture

wow captcha got mad at me....don't ask me a 5 character question if you only allow 3

Mon, 01/24/2011 - 13:51 | 899208 cougar_w
cougar_w's picture

I must be getting pretty good at these now; I guessed today and got it right. I just knew the number and typed it in.

Killer instincts FTW.

Mon, 01/24/2011 - 12:41 | 898970 John McCloy
John McCloy's picture

Ben the master central planner...He got his wish Dow is now 12,000 and gold & silver have been succesfully surpressed as the correlation appears dead for now.

So which is telling the truth the markets or metals? Might be time for gold & silver to hit new highs.

Mon, 01/24/2011 - 12:44 | 898979 JW n FL
JW n FL's picture
by John McCloy
on Mon, 01/24/2011 - 11:41


Ben the master central planner...He got his wish Dow is now 12,000 and gold & silver have been succesfully surpressed as the correlation appears dead for now.

So which is telling the truth the markets or metals? Might be time for gold & silver to hit new highs.


Funny Quote of the week on Monday Morning!

Mon, 01/24/2011 - 12:47 | 898988 Kali
Kali's picture

agree JM.  This farce is so ridiculous.  We are pushing 12000, 2000 to go till we hit the pre-crash high.  Ridiculous.  NOBODY believes the economy is "doing that well".  All it signals is that we are in another bubble.  A Bernank generated bubble.  This bubble will pop soon.  Reality bites hard.

Mon, 01/24/2011 - 12:53 | 899009 Prof Gulliver
Prof Gulliver's picture

Uhh, not everybody:

Super-Cycle Leaves No Economy Behind Before Davos Summit

 For only the third time since the Industrial Revolution, the world may be entering a long-term growth cycle that will lift all economies simultaneously ....”

Mon, 01/24/2011 - 12:57 | 899026 Kali
Kali's picture

Co-conspirator scum. 

Mon, 01/24/2011 - 13:03 | 899033 SheepDog-One
SheepDog-One's picture

'Long term growth cycle'...well nevermind that everyones bankrupt of course....Bunch of BS. I guess if they mean the top 1% thief class grows while gas goes to $7 and food becomes unattainable for everyone in the world but them, yea growth cycle whatever.

Mon, 01/24/2011 - 13:49 | 899205 ElvisDog
ElvisDog's picture

Wow, so the tree really does grow to the sky? Funniest/oddest line from that story:

“The whole world’s going to be rich by the end of this century,” Prescott said.

Hear that peasants in Bangladesh, the good times are a coming. Nowhere in the article is mentioned what technological or cheap energy miracle is going to fuel this boom. They merely mention "booming trade" and "urbanization".

Mon, 01/24/2011 - 12:44 | 898981 gwar5
gwar5's picture

I expect more than a 10% correction. The King has no clothes.


Mon, 01/24/2011 - 12:53 | 899004 SheepDog-One
SheepDog-One's picture

Yes, the only question is 'when'. These guys say nothing, Bob has 2011 pretty much in the 'all is well' bag but there might be a 10% correction somewhere in there? Thats saying nothing and theyre all full of shit. Bob why dont you say the market is at least 40% overvalued...the bulls and the bears all get together for drinks at the titty bar after close, guaranteed. 

Mon, 01/24/2011 - 12:54 | 899011 onlymyopinion
onlymyopinion's picture

10% Correction???? I'm waiting with baited MARGIN!  I do agree about a correction however I think we'll only get 3-5% and at higher levels (1325-40) after earnings season is over. 

Mon, 01/24/2011 - 13:05 | 899038 SheepDog-One
SheepDog-One's picture

THREE % MAX 'correction' now from megabull troll...hillarious! This level of massive market-wide overconfidence is only seen right before bubble implosions!

Mon, 01/24/2011 - 13:22 | 899115 onlymyopinion
onlymyopinion's picture

If being long this market is considered a troll, then so be it.  Please note, my max correction is 5%-lol.  We could very easy test the 2011 low of 1257 (5% pullback off 1325) before the trek towards 1400+ later this year.  Earnings and guidance have been outstanding and will only get better as the year wears on.  JMVHO!

Mon, 01/24/2011 - 13:58 | 899233 topcallingtroll
topcallingtroll's picture

Are you really a troll? Are you.single?

Mon, 01/24/2011 - 14:05 | 899279 SheepDog-One
SheepDog-One's picture

Magical accounting is going great! But Im steadily turning cattle into higher than ever profits while they pump up their garbage stocks daily, which wont return a thing in the end.

Mon, 01/24/2011 - 13:14 | 899084 ChanceIs
ChanceIs's picture

Janjuah deduces that the financials have to run in order for the broad US economy to recover broadly.  This normally makes sense.  How can there be any growth w/o banking?

But I would argue that the banks have had a lot of growth off the bottom, and NONE of it has been organic - rather all government subsidies.  If/when the US starts to grow, then the government will have to withdraw the feeding tube, and the banks will retract.

Mon, 01/24/2011 - 13:18 | 899102 SheepDog-One
SheepDog-One's picture

Everyones believing the hype, they know better, but the herd mentality is winning out. Just what the central banksters have been waiting for as everyone gradualy buys into the 'Hey if ya cant beat em, guess I'll join em' trade. Very dangerous times dead ahead.

Mon, 01/24/2011 - 13:20 | 899106 JW n FL
JW n FL's picture

The decision means that one-time Bear Stearns investors can move ahead with a proposed securities class-action fraud case, though the judge threw out two related lawsuits that had been rolled into the litigation. The investors accuse former Bear chiefs of painting a wildly misleading picture of the firm's finances ahead of its March 2008 unraveling.

The written ruling was made public late on Friday.

Among the defendants is former Bear chief risk officer Michael Alix, who joined the Federal Reserve Bank of New York in November 2008 as a top bank regulation adviser. Alix's lawyer was not immediately available to comment.

Mon, 01/24/2011 - 13:20 | 899107 ak_khanna
ak_khanna's picture

The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls


When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.

Mon, 01/24/2011 - 13:43 | 899184 anony
anony's picture

I expected to become a Neurosurgeon.

Bush expected us to believe that Sadman Hussein had WMDs.

Liberals expect us to believe that government, Central government, can actually not make problems worse or create other ones while ostensibly solving them.

Legitimate investors expect that those who make the wrong bets will lose their money. But AIG, Lord Blankfein, and Hank Paulson and Bill Gross arranged for the opposite to happen.

So much for lofty expectations.

Mon, 01/24/2011 - 13:43 | 899186 George Costanza
George Costanza's picture

I am sure his economic analysis (like Rosenberg and Hussman) is correct, but they have been dead wrong on the equity market.   They will be vindicated but it might be 2,3,4,5, years from now.

For now, the money flows are too strong and equity markets seem unstoppable.

Mon, 01/24/2011 - 13:54 | 899221 topcallingtroll
topcallingtroll's picture

Ten percent? Yawn....wake me up when we get.there. you silver bulls see ten percent moves sometimes in an afternoon. I sure wish.someone had the tranny balls to take a ride on the widowmaker (tivx) and tell us about your long position in real time and not made that triple bagger after the fact. Im thinking about it but just too chicken.

Mon, 01/24/2011 - 16:13 | 899805 Double down
Double down's picture

S&P = Inflation

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