David Bianco

Such a bearish appearance must be the result of the rose-colored glasses affirmative action thing at GE Capital: we have yet to see what the Comcast policy vis-a-vis unbiased content is. Nothing substantially new from Meredith - same focus areas of concern including toxic mortgages on the Fed's balance sheet, non cash flow generating "assets," and consumer, consumer, consumer (apparently she has not read the David Bianco piece either - after all the US consumer now accounts for 100% of Kindle revenues and 0% of US GDP, or so Merrill will soon want you to believe). Yet withComrade Sam making sure all is good for ever (the alternative, just like falling housing prices in your average S&P model from 2005, simply did not compute at the most recent 5 year plenary session), is there any reason to worry about anything? After all the debt auction carnival begins afresh again today at 1PM with $40 billion in 3 years. So long as those keep getting gobbled up without a glitch, all shall be well.

The focus of Rosie's morning note has to do with debunking the latest misconception pushed by Barron's, which in all honesty is merely paraphrasing one of Rosie's own successors at Merrill Lynch - David Bianco, whose most recent fluff piece "Harvesting the Truth" (presented below) was an insult to thinking homo sapiens worldwide. The particular item that Rosie has beef with is the Bianco allegation that the consumer is not really 70% of US GDP. Here is Rosie's rebuttal.

A recent note out of permabullish ward of the state BofAMLCFC (makes sense why they would be permabulls: after all nobody asks why CNBC is a non-stop propaganda mouthpiece for pro-market, pro-GE, pro-stimulus policies... everyone makes fun of it, everyone cracks up at Kudlow and company, but nobody questions it - it does, after all, make complete sense when one considers their agenda is to have all their ever diminishing viewers purchase however many shares of their soon to be former employer GE, even if it means said viewers financial ruin in a month or a year) shares some interesting perspectives on what would happen if a market that is priced for absolute perfection does not end up occurring (or, scarier, does). The note below out of Sadiq Currimbhoy, Merrill's Hong Kong strategist should be kept in mind any time readers enjoy the rosy propaganda from Merrill's David Bianco, which has the form, consistency and texture of two-ply Charmin'.

"Over the full ten-year period, we now see the deficit cumulating to $10½trn, up from $9trn previously." - Goldman Sachs

The greatest piece of "research" humor today (and that is saying a lot as it is in direct competition with Wells Fargo's upgrade of Bank of America) comes from David Bianco, whose report "Six Reasons for Optimism" borders on the surreal.

"One of the key lessons from Japan’s lost decade is that investors’ confidence that the authorities are in control of events will ultimately drain away. In a balance sheet recession, one should expect frequent downturns as the authorities balk at additional stimulus. Only then will zombie investors, sucked dry of confidence, squeeze the remaining puss from equity market valuations. Only then will the 20 year boil of equity market over-valuation be properly lanced." - SocGen's Albert Edwards who apparently is unaware that being a realist is unpatriotic

Extrapolation exercises are fun, even if mostly futile and usually ending in tears. Nonetheless, as the VIX continues collapsing compliments of the dollar carry trade, we provide some observations from the latest bullish converts. It would appear the memo David Bianco received has made its way around the BofA vacuum tube network to the Merrill Lynch Credit Strategy team, headed by Jeffrey Rosenberg, which has thrown in the glove on cautiousness.

David Bianco, CFA, has solidifed his status as the anti-Rosenberg with yet another pump piece issued by TARP recipient extraordinaire BofA/Merrill Lynch. The Chief US Equity Strategist and Rosie replacement sees an S&P earnings of approximately $70, or roughly a Div/0 compared to the most recent negative trailing EPS for S&P companies. How Bianco sees earnings growth on limited cost extraction and a persistently declining top line is just slightly beyond our meager calculating skills.

With normalized cover page headlines like these:

• Robust S&P 500 EPS growth expected for 2010 and 2011
• S&P 500 EPS recovery to outpace the US GDP recovery
• Financials to contribute to EPS growth in 2010 and 2011
• Normalized S&P 500 EPS is above our 2009E and 2010E EPS
• Our normalized EPS supports a strategically bullish stance

is there any wonder how happy Bernstein and Rosenberg must have been to go to work every day?

In what might be a blatant example of investment banking schizophrenia, or merely a good-ole "talking up the book", two of UBS key "strategists", Larry Hathaway and David Bianco, in the span of 1 business day, manage to come out with two essentially contradictory reports.

In what might be a blatant example of investment banking schizophrenia, or merely a good-ole "talking up the book", two of UBS key "strategists", Larry Hathaway and David Bianco, in the span of 1 business day, manage to come out with two essentially contradictory reports.