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Bank Of America: "The Only Reason To Be Bullish Right Now Is There Are No Reasons To Be Bullish"
The latest research report by BofA's Michael Hartnett, from the very start where we see a chart of CDS levels of Glencore and Noble Group...
... a credit event in commodities (note CDS is widening sharply for resources companies – front page chart) may be necessary to cause policy-makers to panic.
... to his comments about the launch of the Chinese currency war, predicted here 2 days before its start:
Stocks have meaningfully underperformed bonds in the past few months as global growth concerns have caused assets related to Emerging Markets, commodities and the resources sector to lurch lower, and the US dollar is threatening an overshoot (it is just 2% from all-time highs as measured by the effective exchange rate), while the China devaluation has sparked renewed concerns over an FX war.
... to his warning that absent QE there is simply no more upside to stocks or earnings:
EPS growth has turned negative everywhere bar Japan. The first half of 2014 saw double-digit gains in EPS, in all except EM. But second quarter 2015 EPS was -5.3% YoY in the US, -3.1% YoY in Europe, -5.8% YoY in EM and up 15.8% YoY in Japan. Simply put, the end of excess liquidity and the end of excess profits have engendered the end of excess returns in 2015.
... to his admission that excess debt and demographics are crushing global growth:
Excess debt, aging demographics, and tech disruption have all conspired to create a very deflationary recovery in recent years. That is why growth continues to outperform value.
... to his warning that the US may have already entered a recession based on inventory vs sales:
China’s deflation concerns exacerbate the precarious position of US manufacturing. Inventories are running far ahead of sales which in the absence of stronger demand, will necessitate further production cuts, and be a negative for profits. Should a manufacturing recession become visible via the NAPM slicing decisively through 50, this would not be positive for stocks, in our view.
... to a rehash of a chart we have shown countless times in just the past month: namely the epic divergence between debt and equity:
Compounding the summer woes of stocks…weakness in the HY market. While the weakness in HY is very concentrated (see quiz – page 8), risk reduction in credit has not been reflected in the S&P500 index.
... the entire thing reads like a rehash of recent Zero Hedge posts.
In fact, the only original point made by Hartnett is his summary, which is as follows: "Arguably the only reason to be bullish risk assets right now is there are no reasons to be bullish."
We couldn't agree more, however we should add that this is indeed bullish if and only if central banks still retain the credibility and potency. The market's negative reaction to the Fed's clearly dovish minutes yesterday has finally shed doubt on this fundamental principal that pushed the market to all time highs since the March 2009 lows.
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Sometimes a duck is exactly what it looks like. A duck.
They must have stayed up all night conjuring this sage advice.
Bullish.
3:30 ramp -> ENGAGE!
Good luck with that "analysis" BoA.
By the way the ramp looks like its failing.
There is always Bullard.
I have always been a big contrarian trader. But the problem with being bullish, cause there is nothing to be bullish about, is that it appears the fed's policies have screwed that all up, too. Trading opinions don't appear to mean what they used to, and haven't for some time, cause of the fed money pump, IMO. "Markets" as a whole, have just been too damn manipulated. I think when TSHTF, sentiment indicators will be useless.
Of course, they knew i loaded up the truck with SPY @ 3:25 pm...
(J/K, i gave up at dow 14k and haven't looked back)
For the deep thinkers among you:
"The Only Reason To Be Bullish Right Now Is There Are No Reasons To Be Bullish"
WTF does this mean?It's a Zen koan.....
Its just another way of saying BTFD
Whatever makes the most sense at any one time...
BofA: "Since the majority of market participants are presently risk-off, there's no competition for the buying oppurtunities. Ergo, buy into those oppurtunities while others miss out on them."
It's about enticing so-called "dumb money" into spending, so the "smart money" can exit their positions while there still is liquidity in the market. This type of behavior on the part of large banks suggests that a market event of some kind might be imminent.
Since there are no reasons to be bullish, he created one.
This man deserve a raise.
It means there is no reason to be bullish, but he didn't want to come out and say that directly.
If there being no reasons to be bullish were bullish, that would contradict his statement there are no reasons to be bullish.
The words Arguably and Only are key.
It means BofA is suggesting you should short the market or stay out. The agreement says, you should believe this only if you believe the central bank has credibility.
However, I am in agreement with another comment that says there is a market event lingering. Follow the advise of BofA or believe its rigged against you because the Fed could print
It's 21st century logic.
Similarly, the only reason to go to war is that there are no reasons to go to war.
The only reason to blow my goddamn head off is that there are no reasons to blow my head off.
And the only reason to take any advice ever from a stock shill is that there are no reasons, etc etc.
See? It makes perfect sense.
Uhm....so be bullish because there are no reasons to be bullish. I think we have reached a new level of stupidity.
If Hunter S. Thompson were alive today he'd have a good quote about this.
I suppose BofA has to do something between major fines. The only thing lacking right now is congress jumping in to make things even worse.....
It don't get much worse than being on death row and out of appeals, and that's where they reside.
Ask Gartman TM
That's all you really need, isn't it?? LOL
is your name yellen? no? then stfu. mr. yellentine sets the price of everything and lloyd run bartertown.
Did Gartman go all in..or out....
Not bullish but the reason to be bullish is low energy prices.
http://albainternazionale.blogspot.it/2015/08/tsipras-si-dimette.html
Tsipras out ....
betcha a dollar the DOW doesn't go (isn't allowed to go) below 17,000....that would have 'bad optics'...
There's a very strong reason to be bullish right now.
Everyone, and I mean everyone, is short. That means that all those shares have to be bought back, sooner or later. The moment that this market rises, ever so slightly, the buying will swell to an avalanche ....
So when do they start dumping fiat from helicopters on people? Never? Well I guess it wasn't really inflation they were looking for now was it?
I just heard that National Grain Reserves are now Empty. Supposedly this has never happened going back to WWII.
If this is true it sounds Dangerous, Treasonous, and should be prosecuted.
What TPTB want to collapse commodities so they sold into weakness... that would be like London's Brown Selling off UK Gold Reserves when the price was at the bottom.
Food, Water, Energy, War Supplies, Oil & Gas Reserves, Rare Earth Resources, Weapons Grade Steel, US Ports & Merchant marine, US R&D & Technology...
Not everything should be sold on the Global Market.
http://michaelsnyder.mensnewsdaily.com/2015/08/did-you-know-that-the-u-s...
Anyone know about Grain Reserves?
Print trillions and the market pops like it got spoon fed a dump truck of Viagra.
It works great until the markets arteries explode and the proverbial appendage goes limp.
Too bad bathhouse Barry is on vacation. He would surely schedule a presser and tell us how this is the fault of Russia, China, Syria, Trump and tea party
No way they'll let it drop into the 16's.... no way!
BTFD sheeple!
Too late Bro. It just did.
Massive short squeeze on Friday 8/21. Enjoy
Only if we head south first. If we rally at the open we will close red. I would buy a 200 point drop should one occur at the open, and sell into any rally off the open
So that's it
That's why BoA bought Countrywide Financial in 2008. There was no reason to be bullish about the future.
It had nothing to do with destroying incriminating evidence