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SocGen's Investment Strategy For 2010
By Economic Forecasts & Opinions
Société Générale (SocGen), France’s second-biggest bank, has told its clients to be bullish on commodities, stay with stocks and "anything but cash" in 2010. SocGen's Chief Strategist Alain Bokobza spoke to CNBC on Jan. 11, 2010 about the investment strategy.
Fear of Double Dip to Prevent Bond Crash
Bokobza sees an ongoing momentum for growth in the U.S. with employment growth, as well as the emerging economies. The consensus seems to be we are heading towards a bond market crash in 2010; nevertheless, fear of a double-dip will prevent a bond market crash. The U.S. Federal Reserve and G4 countries are expected to stay on a near-zero interest rate for much longer than expected, which makes yield curve play attractive.
Yen - The Carry Trade Currency
Bokobza expects the U.S. Federal Reserve and the ECB to announce this summer that the monetary tightening process will start at the end of 2010 or in Q1 of 2011. At the time of the announcement, i.e., this summer, carry trade will begin to switch from Dollar to Yen.
Overall, the Dollar is expected to be fairly flat against the Euro by the end of this year; however, Yen, as the new major carry trade currency, would fall "massively".
SocGen's Main Advice For 2010
With near-zero interest rates, getting out of cash and into other riskier assets such as equities or commodities should be the strategy this year.
- Anything but cash
- Stay in equities
- Expect rising M&A cycles
- No bond market crash
- Yen carry-trade
- Be a commodity bull
Refer to SocGen's Cross Asset Research Report dated Jan. 4, 2010 from Scribd.com HERE for full commentary and recommendations.
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What's the best way to short the yen? I think that's the only thing they are right about.
Hmmm. Does Albert know about this?
2010: Put all your money into the riskiest stock/asset
2011: ???
2012: Profit
What Bernanke has done is exactly what Roosevelt did. He is prolonging the recession. That’s how it looks to me. We’ve already been through the biggest bank robbery in history with the banks doing the robbing. What’s left? More stimulus? Look at the results.
Trend Research’s Gerald Celente’s feeling is that this stimulus stuff is running out of steam; that they are poking this horse that doesn’t want to go; they poke and poke and poke but it won’t go. They cook the books, hide the numbers, heat the frog little by little ‘til it’s boiled to death. Says Celente, in 2010 the frog is dead: the economy’s failed: the system has crashed. And all the while, says Celente, we’re giving the money to the people who need it least, to the big three--JP Morgan Chase, Morgan Stanley and Goldman Sachs—who are right now splitting up their $50 billion (that’s with a “B”) in bonuses and executive compensation for their great, great work—as rewards for their genius, as the best criminal minds that money can buy for doing deals, mainly dirty deals. And maybe what Alain Bokobza at SocGen knows that most of the public doesn’t know when it comes to “investment strategy,” is that HR4173 guarantees the TBTFs $4 trillion (that's with a “T”) if they begin to fail in 2010.
When Bernanke tightens, we’ll hear about it when essentially it’s a done deal. How ridiculous to say he’s going to announce way in advance. When has the Fed ever done that except in private to the boyz? They take care of themselves.
All just my opinion, and a bit of Celente’s, of course. And my way of saying, that IMO, a forecast from SocGen isn’t worth too much; SocGen’s going to be influenced like the rest of us-- when the economy backlashes. So take your pick, Alain Bokobza on video or Gerald Celente on King World News video with his predictions for 2010 (after all, that’s what makes a horserace):
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/1/9_Gerald_Celente_files/Gerald%20Celente%201%3A9%3A2010.mp3
I agree. Bernanke being a so called expert on the great depression has to be so scared of a double dip recession that he is willing to do anything to avoid that, because then it would appear that we are in for a repeat of that era. So they have pumped the markets and over did it as to scare the shorts out of the market because once the ball starts rolling downhill its very hard to stop. I believe we saw another instance of this over pumping today in the S&P eminis.
the more cash you dump the less its worth so the first one out wins buy goods now!
I do a Colonel Kurtz for a few weeks deep in the Cambodian jungle - really, no SH*T! Sprey Veng province - and when a I return to ZH not a single Goldman lead-in piece. Wuz up? here's my tried and true anti-Squid vid mash-up on YouTube http://www.youtube.com/watch?v=T9yvSmSGjNg ...
I can't quite put my finger on it, but something tells me that Alain Bokobza used to be a woman....
So, SocGen is in all cash right now, getting ready to short the markets?