SocGen's Albert Edwards Lowers Equity Allocation To Minimum On Fears "Fed Will Destroy The World"

Tyler Durden's picture


It has been a while since we heard from SocGen's uber-soothsayer Albert "Ice Age" Edwards. He is now back, and with quite a bang, reiterating a line from Marc Faber that will prove 100% accurate in a few short years. The French bank's forecaster, who has proven more accurate than most (and certainly far better than Wall Street's permabull-by-default brigade which is trotted out every day there is a market uptick and promptly tucked in when reality returns) just made the call to cut equity allocation to the lowest possible 30% (from 35%), while hiking cash from 15% to 20%. Deja vu? "the last time I reduced my equity weighting to 30% was 8 May 2008 when the S&P was stlll standing at 1400."

From Albert Edwards:

Lowering equity weighting to minimum - "The Fed will destroy the world”


In 2005 when Alan Greenspan was being hailed as a “maestro” I wrote that his policies would ruin the world and history would judge him to be “an economic war criminal”. I now think Ben Bernanke’s policies will prove even more ruinous than Sir Alan’s (yes unbelievably he still retains his honorary knighthood). Hence we are lowering our equity weighting to 30%, the minimum possible. The last time I did this was 8 May 2008.

  • I'm reading some insanely stupid stuff at the moment. Okay, I know some of my writing is pretty insane, but when I read direct quotes and commentary about Bernanke's policy of driving up asset prices in general and equity prices in particular, I almost want to cry over the ludicrousness of this position. The Fed is pursuing the same road to ruin as it did between 2003-2007. I'm becoming more and more convinced that, Gloom, Boom, & Doom's Marc Faber is right when he says that "the Fed will destroy the world" - link. (Also keep your eyes open for Dylan's next Popular Delusions.)
  • I agree with Philadelphia Fed President Charles Prosser, who dared to suggest the Emperor had no clothes by saying that QE, including the bank's purchase of $40bn a month of mortgage bond purchases, was unlikely to do much to boost growth and decrease unemployment.
  • Regular readers will know that in the main, my market timing is unerringly inaccurate, normally months if not years too early. But for those who might write off this move down to 30% as the yet more rantings of a lunatic, the last time I reduced my equity weighting to 30% was 8 May 2008 when the S&P was stlll standing at 1400.
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Thu, 09/27/2012 - 07:45 | 2834790 Debtonation
Debtonation's picture

Good thing I've been stocking up on physical food lately.

Thu, 09/27/2012 - 08:00 | 2834813 ratso
ratso's picture

Another load of BS from Bernanke bashing doom mongers.

Thu, 09/27/2012 - 08:04 | 2834821 overmedicatedun...
overmedicatedundersexed's picture

sam nunn ex dem senator on cnbc:" compramise push back the cliff for six months so we can think more.."(not that it pushes it far from the nov election, no no it's for thinking).LOL

looking very good there Sam, very rich, very in the know, very reptile like. he's touted as a rational pol out to do good for our kids..LOL this MSM stinks 2 -3 minutes and i gotta just shut it off.

Thu, 09/27/2012 - 09:28 | 2835105 Thomas
Thomas's picture

I picked a bad day to quit smoking crack.

Thu, 09/27/2012 - 09:59 | 2835204 Stackers
Thu, 09/27/2012 - 08:09 | 2834835 NewWorldOrange
NewWorldOrange's picture

"Another load of BS from Bernanke bashing doom mongers."

You must be absolutely blissful;)

Thu, 09/27/2012 - 08:11 | 2834839 LongSoupLine
LongSoupLine's picture

fuck you ratso bank troll sacksuck

Thu, 09/27/2012 - 08:42 | 2834924 JPM Hater001
JPM Hater001's picture

Take it easy.  He's doing the best he can with his limited intelligence.

Although a fuck you seems fair from time to time now that I think about it.

Thu, 09/27/2012 - 08:43 | 2834923 MFLTucson
MFLTucson's picture

How about you fill us in on what Greenspan and Bernanke have done right??  If this is doom mongering then I have to assume you know something more that the rest of us, so we will all wait in anticipation of your wisdom!


Of course I will expect nothing from you because you are undoughtedly a fucking idiot to write something so stupid.

Thu, 09/27/2012 - 08:47 | 2834944 EscapeKey
EscapeKey's picture

Yes, because all these GREEN SHOOTS in our STRONG RECOVERY which Bernanke, Geithner and Nobama promised us have all turned out exactly as your kind told us it would, and the Gini coefficient is on a stong rebound in favour of the middle class.

Your clueless level = Keynesian economics student.

Thu, 09/27/2012 - 10:00 | 2835215 exi1ed0ne
exi1ed0ne's picture

There was a time, not long ago, when having a few months of food on hand was normal.  Then, supply chains got better and more efficient, warehouses and huge supermarkets were built to ensure there was endless supply available for consumers.  Now things have gotten so efficient that we are doing real time allocation in the supply chain.  Why have a huge warehouse with capital lying on pallets?  Lets just order what we need plus a day or to in order to have Just In Time delivery.  Makes total business sense, but it also makes the supply chain very fragile.

Nowadays you have people conditioned to believe the shelves will always be full in the store, and have MAYBE a week of food on hand.  I hope for the sake of your family there is never a disruption (weather, earthquake, tornado, flood, outbreak, Canadian invasion) longer than your food stores.  Having a store of food, water and first aid supplies isn't just about the zombie apocalypse.  Heck, at least you'll eat for a while if you get laid off.

Thu, 09/27/2012 - 08:04 | 2834820 zilverreiger
zilverreiger's picture


Thu, 09/27/2012 - 08:06 | 2834827 saturn
saturn's picture


Thu, 09/27/2012 - 08:48 | 2834954 EscapeKey
EscapeKey's picture

Don't they call McDonalds and KFC "food" - in which case I tend to agree with you.

Thu, 09/27/2012 - 08:08 | 2834833 stocktivity
stocktivity's picture

Chuck Shumer (Democrat) told the Bernanke to "get to work".  Romney (Republican) has already said he would fire Benny. Obama (Democrat) will keep him.  Benny just went all in.  HELLLLLOOOOO!!!! What part don't people understand???

Thu, 09/27/2012 - 08:50 | 2834960 EscapeKey
EscapeKey's picture

Ooh yeah I can't wait for Obamney's Bernanke replacement who will do more of the same.

Thu, 09/27/2012 - 09:38 | 2835141 ATM
ATM's picture

insuider info is Romney would pick John Taylor - Stanford. He of the Taylor Rule.

Thu, 09/27/2012 - 10:10 | 2835252 metastar
metastar's picture

Its a small head for such a big suit.

Thu, 09/27/2012 - 07:45 | 2834791 vinayjha
vinayjha's picture

I wished fed could simply deposit the money to people account rather then increase their balance sheet by trillion of dollar. Everyone could have easily got $50k by now

Thu, 09/27/2012 - 08:08 | 2834834 Urban Redneck
Urban Redneck's picture

If everyone received 50,000 sea shells with which to trade, why would someone be willing to exhange real goods or services for more worthless sea shells... Even the retarded Krugmanites will concede inflation would occur under such circumstances, as every seller would demand more sea shells for the same quantity of guns & butter or bread & circus.  

Thu, 09/27/2012 - 08:10 | 2834837 Antifaschistische
Antifaschistische's picture

Vinay! Your suggestion of distribution would benefit the 99.9% which means it will never happen....while POTUS pretends to believe in redistribution of wealth, its only as a kickback from the .1% who are enriched by current policy. tHATS how the mob works, thats how the DC/NY machine works

Thu, 09/27/2012 - 08:41 | 2834920 Beam Me Up Scotty
Beam Me Up Scotty's picture

Except it won't benefit the 99% either.  You think gas will stay at $4 a gallon if everyone got $50k?  Why not make everyone a millionaire?  Then you can buy your $10,000 loaf of bread.  Its called INFLATION moron.

I know, you thought inflation was what happened when you looked at the lingerie section of the Sears catalog.

Thu, 09/27/2012 - 08:14 | 2834848 LongSoupLine
LongSoupLine's picture



vinay, that would suggest the Fed exists to support the people and not banks.  This simply is not the reality.

Thu, 09/27/2012 - 09:09 | 2835040 KidHorn
KidHorn's picture

Finally, someone understands that the FEDs job is to support banks. The FED works for the banks, not the people. It's not even part of the US government.

There are way too many morons who post comments like 'The FED is bailing out the banks' as if it's some secret plan. They're supposed to bail out the banks. It's what they do.

Thu, 09/27/2012 - 07:53 | 2834792 GetZeeGold
GetZeeGold's picture



"Fed Will Destroy The World"


Use it and abuse it.....rinse and repeat. Play with it...but don't kill it.


Thu, 09/27/2012 - 07:55 | 2834805 pamriallc
pamriallc's picture

"fondle the cube"

Thu, 09/27/2012 - 07:58 | 2834810 GetZeeGold
GetZeeGold's picture



Be careful with that....we've only got the one.


Thu, 09/27/2012 - 10:33 | 2835330 franzpick
franzpick's picture

It'll work better if you add a little tonguesten.

Thu, 09/27/2012 - 07:45 | 2834793 Meesohaawnee
Meesohaawnee's picture

the 64k question is.. does the fed care? survey says....

Thu, 09/27/2012 - 08:12 | 2834842 trebuchet
trebuchet's picture

.... the fed? who's that??

Thu, 09/27/2012 - 08:15 | 2834852 LongSoupLine
LongSoupLine's picture

It's now the 64B question...inflation. (note: do not refer to CPI)

Thu, 09/27/2012 - 08:41 | 2834922 CrimsonAvenger
CrimsonAvenger's picture

oh, they care - they care lots. Just not about the same stuff you do. Your interests and theirs are not the same.

Thu, 09/27/2012 - 07:46 | 2834794 crito
crito's picture

money aint got no owners, only spenders...

Thu, 09/27/2012 - 07:55 | 2834803 GetZeeGold
GetZeeGold's picture



I hope the Printers have Secret Service protection.


Thu, 09/27/2012 - 08:17 | 2834859 LongSoupLine
LongSoupLine's picture

only if the printers have hooker access...

Thu, 09/27/2012 - 07:47 | 2834795 becky quick and...
becky quick and her beautiful mouth's picture

need to buy more propane tanks...looks like it will be cold at the end of the world this year.

Thu, 09/27/2012 - 10:42 | 2835361 franzpick
franzpick's picture

Don't forget the propane electric generators.

Thu, 09/27/2012 - 07:48 | 2834796 Ralph Spoilsport
Ralph Spoilsport's picture

We're on the same road to ruin because it worked so well last time. They have had the same map for a while and this "road to ruin" is clearly marked (except on the new iPhone Map App).

Thu, 09/27/2012 - 08:08 | 2834832 Mister Ponzi
Mister Ponzi's picture

The quality of their maps is infamous - at least so the official story goes:


Thu, 09/27/2012 - 08:23 | 2834876 Urban Redneck
Urban Redneck's picture

Lets see-  the AF loses an F-117 stealth fighter over Yugoslavia, and 41 days later the CIA "accidentally" bombs the local HQ of the largest industrial espionage shop in town...

Thu, 09/27/2012 - 09:00 | 2835009 XitSam
XitSam's picture

Everyone assumes that an American was flying that F-117. Hmm. Haven't thought about that rumor in quite a while.

Thu, 09/27/2012 - 07:48 | 2834797 NaiLib
NaiLib's picture

SocGen is one of the three IndexWatchDogs in Europe, Making sure there is no real pricing of the indices. As soon as volume is down a bit, they come in with full force driving up the indices seamingly with the only wish to pay as much as possible...

Thu, 09/27/2012 - 07:52 | 2834799 orca
orca's picture

If he is (correctly) assuming the FED is destroying the world, why is he at 70% cash? Were he to tell his investors that he returns the money and they are to buy physical stuff with it I would get it, but what I understand from his rant is that he plans to let all that money gather dust while hyperinflation is about to kick in.
What is left of my non-physical net worth is 130% in stock, for that very reason.

Thu, 09/27/2012 - 08:41 | 2834918 NewWorldOrange
NewWorldOrange's picture

I think he was speaking for the allocation of SocGen's accounts, not his own personal account. And it sounds like that 30% minimum (which he states twice is the minimum allowable) is mandated either by the corporate charter or in contracts with account holders, or perhaps even by the laws in Europe. Tylers?

Thu, 09/27/2012 - 07:52 | 2834800 Landotfree
Landotfree's picture

The fed isn't going to destroy the world, all you lemmings are and the generations before you who wish to engage in a ponzi scheme.  ZH is apparently made up unfunded liabilities that do not wish to be liquidated, unfortunately or fortunately there is only one outcome from using the equation.... liquidation of the unfunded liabilities.

Blaming the Fed is for this is like blaming the Fed for the Sun rising in the East this morning.  There is nothing the Fed can do to stop the collapse.  Sorry.

Thu, 09/27/2012 - 07:55 | 2834804 bigbwana
bigbwana's picture

You sound like Illuminati spawn.

Thu, 09/27/2012 - 07:58 | 2834809 Landotfree
Landotfree's picture

No, I sound like somone that knows 8th grade Math.  Sorry, someone is going to have to go, matter of fact quite a few are going to have to go this time.


"The Oracle: Seems like every time we meet I've got nothing but bad news. I'm sorry about that, I surely am. But for what it's worth, you've made a believer out of me. Good luck, kiddo." - The Matrix Reloaded

Thu, 09/27/2012 - 08:03 | 2834819 GetZeeGold
GetZeeGold's picture




No, I sound like somone that knows 8th grade Math


You'll learn Algebra in the 9th will totally change your perspective.


Thu, 09/27/2012 - 08:13 | 2834846 NewWorldOrange
NewWorldOrange's picture

Perfect. Laughed out loud

Thu, 09/27/2012 - 08:04 | 2834822 bigbwana
bigbwana's picture

The Fed IS owned by the Illuminati. JFK knew it and tried to stop them, They assasinated him. Evil. Evil. Evil.

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