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Bank of America On Why, Contrary To Popular Delusion, America Is Not Decoupling

Tyler Durden's picture


Everyone's favorite stock pitchman, Bob Pisani, who lately apparently has the capacity to learn just one line and just regurgitate it ad nauseam, was on CNBC earlier screaming how gold is down because the US is so much better than the world, when in reality gold is once again being sold to fund early margin calls (yes, institutionals are that levered right now). As for the US decoupling story, which time after time is dragged out, only to be shelved once the impact of trillions in liquidity fades, and which is never different this time, here is none other than Bank of America explaining to the likes of Pisani why "the US economy is likely to prove a faulty engine of global growth." Read - no decoupling, despite what the market may be trying to say. And yes, the market, and especially the Russell 2000 is never the economy.

From Bank of America:

US a faulty engine of global growth


It is a testament to the psychology of the marketplace that the first story on Bloomberg TOP News reads, "Economy of US Enters Sweet Spot as China's Growth Slows." The article notes that "the US once again may be emerging as a main engine for global growth -- and at an opportune time, as Europe slides into recession and China's economy decelerates." This is a risky proposition, in our view.

Consider the following:

  • Real disposable income has contracted two months in a row and is flat over the last three, even in the face of a pick-up in employment. The improvement in consumption has been financed by a drop in the savings rate, down to 3.7%, the lowest since mid-2009. Weak income + lower savings = softer consumption.
  • The housing market data has softened. Virtually every housing indicator released in February has come in below market expectations: starts, newand existing home sales. While prices likely bottom this year, they are unlikely to turn in a way that stimulates new residential construction.
  • The consensus is mistiming the impact of the shock from Europe to the US. Europe is a local shock that goes global, hitting via the confidence and trade channels. It should take time first for Europe to slide into recession and then for the US economy to weaken.
  • Investors are only now beginning to focus on the fiscal cliff at the end of the year. The range of plausible outcomes is very wide and includes some very ugly outcomes. Faced with a dense fog of uncertainty, businesses and households will likely slow down.

So, in a number of respects, the US economy is likely to prove a faulty engine of global growth.

Bob Pisani thanks BAC for explaining it so clearly, even a caveman will get it.


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Wed, 04/04/2012 - 09:45 | 2316096 vmromk
vmromk's picture

When this piece of shit company finally go belly-up ?

Wed, 04/04/2012 - 09:45 | 2316099 Id fight Gandhi
Id fight Gandhi's picture

Bring back mark to mkt will do it.

Wed, 04/04/2012 - 09:46 | 2316103 I think I need ...
I think I need to buy a gun's picture

bob pisani is doing a diservice to americans

Wed, 04/04/2012 - 09:47 | 2316106 I think I need ...
I think I need to buy a gun's picture

how can he get up and work everyday making a dishonest living?

Wed, 04/04/2012 - 10:16 | 2316208 Vince Clortho
Vince Clortho's picture

 If you have no conscience, it's a great job.

Wed, 04/04/2012 - 10:51 | 2316364 Carl Spackler
Carl Spackler's picture

The way Cramer gets up every morning and does the same.

Wed, 04/04/2012 - 12:49 | 2316823 Dadburnitpa
Dadburnitpa's picture

Whores gotta eat too.

Wed, 04/04/2012 - 09:52 | 2316117 GetZeeGold
GetZeeGold's picture



Poor Bobby.......lost his credibility years ago. Just the shell is left....or is that shill?


Wed, 04/04/2012 - 10:18 | 2316219 Ayn Rand
Ayn Rand's picture

He is trying to keep his job.

Wed, 04/04/2012 - 10:57 | 2316390 Bansters-in-my-...
Bansters-in-my- feces's picture

Around here we call bob,Bob Pissonme.

We have a picture hanging in the urinal bowl and  pisson him.

Wed, 04/04/2012 - 11:27 | 2316502 chipshot
chipshot's picture


Wed, 04/04/2012 - 09:47 | 2316104 fonzannoon
fonzannoon's picture

Anyone notice gasoline is up? This may be bad news for Ben. IMHO he wanted oil etc. to get knocked down with the metals. Stocks going down would just be collateral damge. I don't think he is going to get his way. Inflation is rising and if the bond auctions are a dud he is in deep shit. He may have to engage in QE at levels no one is comfortable with.

Wed, 04/04/2012 - 09:52 | 2316130 the not so migh...
the not so mighty maximiza's picture

He WILL have to engage in QE at levels no one is comfortable with.

Wed, 04/04/2012 - 09:53 | 2316140 Dr. Engali
Dr. Engali's picture

Yeah gas refuses to budge. I don't think it will sell off unless things get really ugly in the markets. But then it will be only temporary.

Wed, 04/04/2012 - 09:56 | 2316150 SheepDog-One
SheepDog-One's picture

He wont be doing QE.

Wed, 04/04/2012 - 10:01 | 2316169 Dr. Engali
Dr. Engali's picture

He doesn't have a choice. He will have to and gas will go to $6.00. Ben has to print it is just a matter of when. The polititcos will have to find somebody to blame high gas on. Iran looks like a prime target.

Wed, 04/04/2012 - 10:23 | 2316237 SheepDog-One
SheepDog-One's picture

I tell you guys what....the day Ben comes out and announces 'QE3' I promise to upload a video here of me eating my straw hat.

Wed, 04/04/2012 - 10:32 | 2316265 MachoMan
MachoMan's picture

Exactly...  stealth QE at best...  nothing or repos, et al, at worse.

Ben can still do this so long as the dollar can catch a bid...  sure, it means dunking other currencies under the water, which risks the whole "lets maintain a range for all the top currencies" plan, but it's also necessary given price increases in staples and consumer necessities...  he needs to blow off some steam.

And, the money changers don't care because they'll win on the whipsaw volatility...

The big issue though is each round, the fighter becomes more and more tired...  eventually growing weary and punch drunk...  and more susceptible to knockout/stoppage on shaky legs.  The system becomes more and more fragile with each successive cycle.

Wed, 04/04/2012 - 10:35 | 2316282 fonzannoon
fonzannoon's picture

what if he does not announce it, but the money supply just expands for "other reasons"?

Wed, 04/04/2012 - 12:03 | 2316618 Amagnonx
Amagnonx's picture

Well, I'm not sure he will announce it - but I can't see any alternative.


What do you see as the alternative path that might be taken?  Borrow from China, or the ECB?  Or cut spending by a heap?  I'm not sure any of those measures are credible - I guess the US could keep hitting up China for cash, but how much more will they take?

Wed, 04/04/2012 - 10:20 | 2316220 Vince Clortho
Vince Clortho's picture

Seems like the options are limited  to:

1. Hyperinflation

2. Massive Deflation

3. War

Wed, 04/04/2012 - 10:23 | 2316232 fonzannoon
fonzannoon's picture

As Dr. Engali said take option 1 and blame it on choice number 3 (Iran)

Wed, 04/04/2012 - 10:30 | 2316257 SheepDog-One
SheepDog-One's picture

Those who think they have another option here to just 'coast along' may as well be talking about smooth sailing in a Cat 5 Shiticane in a rubber dingy.

Wed, 04/04/2012 - 10:32 | 2316273 fonzannoon
fonzannoon's picture

I did not see coast along as an option. I saw Hyperinflation, massive deflation and war as the alternatives. People like me thinking they will do QE are not saying that they are right to do it. Most probably fall into the massive deflation camp and let the dust settle and start over.

Like I said yesterday by the way I am not your serial junker for whatever it's worth.

Wed, 04/04/2012 - 10:28 | 2316253 LongBalls
LongBalls's picture

How else is the government going to finance the $1.2T deficit? And if Obama care gets approved? He may not print in the short term. But he WILL print. 

Wed, 04/04/2012 - 10:31 | 2316264 SheepDog-One
SheepDog-One's picture

For all anyone knows, they may be done monetizing the debt, what some people call 'printing', and ready to move along to the next phase. 

Wed, 04/04/2012 - 11:51 | 2316586 Amagnonx
Amagnonx's picture

Pick Ben for a default before elections man?  Hmm - not my opinion, he will print because there is no revenue and invading Iran is gunna cost mega bucks.  Though I have a feeling USSEnterprise is going to get sunk by IDF torpedoes, then Israel will lob nukes at Iran because 'they done it - I swear'.


China and Russia might actually do something then I guess - I think we are being forced into WWIII  -is everything just going to plan .. ?


Why should people be at the mercy of psychopathic states - lets all just ditch the retarded game and declare ourselves soveriegn beings who owe no allegiance to these out of control warmongers.

Wed, 04/04/2012 - 10:15 | 2316207 KickIce
KickIce's picture

Not suprising with all the refineries being shut down.  They'll need more significant drops in crude before gas drops.

Wed, 04/04/2012 - 10:33 | 2316269 SheepDog-One
SheepDog-One's picture

LOL, the more demand drops and production slows, the HIGHER gas price goes! Watch and see!

Wed, 04/04/2012 - 09:47 | 2316105 youngman
youngman's picture

I heard his rant this AM....he sounded desperate to try to convince the sheeple that the USA is great.....all good...spend spend spend...the gold selloff is either a raid another defaulted hedge one is selling gold to buy Apple....

Wed, 04/04/2012 - 09:48 | 2316113 I think I need ...
I think I need to buy a gun's picture

dont worry china will buy anything americans don't want to hold

Wed, 04/04/2012 - 10:56 | 2316384 Carl Spackler
Carl Spackler's picture

Not so fast, my friend.  The Chinese are tightening the reins too amid domestic uncertainty.

Article in April edition of Wine Spectator explains how he Chinese have suddenly stopped buying Bordeaux futures, and the price of the Bordeaux futures markets has dropped 40% this year.

The reasons cited...Chineses investors are bracing for the real estate bubble to pop, and are strapped for cash as the newly-developed real estate they must now service the mortgages for has massive vacancy and little cash flow.

Wed, 04/04/2012 - 11:45 | 2316563 Amagnonx
Amagnonx's picture

Yeah - they are going to get hammered, Communists out in the next 5yrs?  Maybe.  If they could swing it, they should go buy up $1 tril in US real estate - its not cheap, but its hella better than paper.

Wed, 04/04/2012 - 10:34 | 2316280 SheepDog-One
SheepDog-One's picture

Got to somehow get retail to panic buy their stock bubble!

Wed, 04/04/2012 - 09:47 | 2316107 Dick Darlington
Dick Darlington's picture

 the Russell 2000 is never the economy


But but but!!! Lol!

Wed, 04/04/2012 - 09:50 | 2316124 gjp
gjp's picture

$5 coffee drinkers are somehow decoupling, it seems.  Another new high in Starbucks, a $40b coffee company trading at 35x earnings.

Apple barely down, carnage in commodities and overseas markets.  Central Planner Nirvana lives on ...

Wed, 04/04/2012 - 10:12 | 2316198 Vincent Vega
Vincent Vega's picture

Robo is that you?

Wed, 04/04/2012 - 10:16 | 2316210 Dr. Engali
Dr. Engali's picture

No that's not Robo. But not a bad impression.

Wed, 04/04/2012 - 10:22 | 2316230 gjp
gjp's picture

I'm just trying to show how badly our 'markets' are allocating 'capital' as a result of central planning.

Markets may be down today, but the bet on US (over)consumption just keeps winnning, and it disgusts me so much I have to post about it.

Wed, 04/04/2012 - 09:51 | 2316125 evolutionx
evolutionx's picture

What is this?


Even Congress Wants To Know What The NSA Is Doing With This $2 Billion Utah Spy Center


Maybe you've heard of it and maybe you haven't, but in Bluffdale, Utah alongside one of the largest polygamist sects in America, the NSA is building a one-million-square-foot data collection center — five times the size of the U.S. capital.

Wed, 04/04/2012 - 10:08 | 2316188 Dr. Engali
Dr. Engali's picture

Even my 71 year old mother in law knows about this. It shocked me when she started talking about it. So it seems this is on peoples radar anyway.

Wed, 04/04/2012 - 09:52 | 2316127 q99x2
q99x2's picture

You have CNBC at the first 100 point DOW drop blaming the FED because they won't print more. The Bernank has to do road tours for PR. And, Geithner is getting out while he still can. And, here we go into the ravine with the rest of the train.

Rumor PLease.

Wed, 04/04/2012 - 09:51 | 2316128 Confundido
Confundido's picture

Somebody wrote an interesting piece on this decoupling lie, back in January: "

Wed, 04/04/2012 - 09:55 | 2316131 SheepDog-One
SheepDog-One's picture

'US economy the engine to fuel global growth'?

BAAH HA HA what economy? You mean borrowing and consuming, and printing fake money? GEE yea theyre might be a problem with that mighty economic engine! Its a lawnmower engine in a semi truck!

Wed, 04/04/2012 - 09:55 | 2316147 WoodMizer
WoodMizer's picture

That's why bernanke is shifting as fast as he can.

Wed, 04/04/2012 - 09:59 | 2316162 gjp
gjp's picture

just sickening isn't it?  More like the bomb that will blow up the global economy.  The Anglo Saxon economies and their high finance scams are going to bring everyone down, and yet these sycophants can still trumpet their economic superiority with a straight face?  Sickening.

Wed, 04/04/2012 - 09:55 | 2316145 surf0766
surf0766's picture

gas hit $3.93 here ..  7 more cents and economy stops. Just like it did in 2008 and 2011.


Wed, 04/04/2012 - 09:58 | 2316158 marcusfenix
marcusfenix's picture

$ 4.03 where I live, and the company I work for suddenly decided "free delivery" was no longer a good idea.

Wed, 04/04/2012 - 10:27 | 2316251 hettygreen
hettygreen's picture

Add a buck and change to that figure in the city I live in north of the 49th. Second worst unemployment rate for a large Canadian city too. You'd never it know it though by the dual exhaust spewing, late model large SUV contribution to traffic congestion around here at all fucking hours of the day. Doesn't matter because our banking shit smells like lavender and  ho(u)sing is not in a bubble. We are all feeling sooooo wealthy and superior to you poor yanks!

What was that about pride coming before the fall again?

Wed, 04/04/2012 - 10:26 | 2316248 SheepDog-One
SheepDog-One's picture

Just the way I see it, they can carrot and stick and promise this or that all they like but $4-$5 gas shuts the whole thing down, and printing more only makes gas rise higher. Time to face the facts, this train is out of track here.

Wed, 04/04/2012 - 12:57 | 2316843 SemperFord
SemperFord's picture

You should be happy, 4.40 here and higher in rich areas!

Wed, 04/04/2012 - 09:56 | 2316153 Arbeit_Macht_Frei
Arbeit_Macht_Frei's picture

Does anyone know where we can find the data to substanciate that this: "gold is once again being sold to fund early margin calls (yes, institutionals are that levered right now)" is the case? Thx

Wed, 04/04/2012 - 09:57 | 2316154 marcusfenix
marcusfenix's picture

how can a country be the "engine of global economic growth" when it's not just broke, but 15.5 trillion in the hole?


Wed, 04/04/2012 - 10:03 | 2316172 surf0766
surf0766's picture

Shhhh  Have you seen The Secret...

Wed, 04/04/2012 - 11:23 | 2316484 Amagnonx
Amagnonx's picture

Because it is the largest manufacturer of futuristic wallpaper - you will be suprised at the new and inventive ways the nations greatest export will be put to in coming yrs - print like you mean it.

Wed, 04/04/2012 - 10:05 | 2316175 jjsilver
jjsilver's picture

Where is your evidence "when in reality gold is once again being sold to fund early margin calls"

Wed, 04/04/2012 - 10:12 | 2316178 LawsofPhysics
LawsofPhysics's picture

Global growth, hhmmm.  Let's think about this.  If the "earth" is trying to be a profitable corporation, who are we selling to?  Mars? And more importantly, what are the Martians providing the earth with in exchange for our services/commodities?  Fusion technology?

People really still believe growth can continue without an increase in available energy and an increase in the flux of energy?  Good luck with that.

Wed, 04/04/2012 - 10:06 | 2316179 Yardstick of Ci...
Yardstick of Civilization's picture

Is Alex Hope the baby that stars in all those etrade commercials? The guy is really young.

Wed, 04/04/2012 - 10:06 | 2316181 NEOSERF
NEOSERF's picture

Gold is down simply because everyone is on a knife edge wondering if every 100 pt down start to the market is "The Big One" and wants to free up cash if it is...simple as that..

Wed, 04/04/2012 - 10:19 | 2316217 Centurion9.41
Centurion9.41's picture

Uh, no.  It' because the USD caught a bid because Uncle Benny said he isnt going to create more of them. 

Higher USD means it takes less of them to buy other pieces of paper, affectionaltely called stock certificates.  Isnt that nice, you get a certificate when you give someone Uncle Benny's bills. 

The everyone you imply, the gambling cabal that uses public money to backstop their game, believes Dick Fould's "we cant run out of this kind of money" dogma even more now than when he last said it.

P.S., if "everyone" thought the "Big One" was coming, the Sheeple would be out buying TVIX and those "gold stock certificates" - aka "GLDs".


Wed, 04/04/2012 - 10:12 | 2316199 Centurion9.41
Centurion9.41's picture

Mexico seems to have not gotten the message...

Ironically, her pet name is "EWW"

Wed, 04/04/2012 - 10:15 | 2316204 Ayn Rand
Ayn Rand's picture

Pisani was never a cheerleader before.   Management must have kicked his ass to get on baord the CNBC cheerleaders band wagon.

Wed, 04/04/2012 - 10:16 | 2316206 mess nonster
mess nonster's picture

Money is nothing but energy credits. 15, 16 trillion $$ in the hole simply translates into a level of growth that can be generated (and quantified) by a certain number (X) of barrels of oil. Global indebtedness, plus the interest that debt will generate, equals Xx barrels of oil needed to generate the growth neccessary to service that debt.

Do we have the needed energy supplies to "grow" our way out of debt? If the answer is yes, then, Bernanke is right- this current economic downturn is all just temporary. If we have the trillions of barrels of (economically) recoverable oil, then paper wins and gold is nothing but rings and teeth. If not, well...


Wed, 04/04/2012 - 10:16 | 2316209 Neo1
Neo1's picture


Wallstreet needs to stop,

looking out the window of their belly button.

The sh_t is clouding their thinking and vision.  

Wed, 04/04/2012 - 10:18 | 2316212 FreeNewEnergy
FreeNewEnergy's picture

Anyone notice the direct correlation in gold, silver and stocks the past couple of weeks? Occurs mostly on the downside, and the declines for the metals usually outpace the stock markets.

Is this 2008 deja vu, when everything crashed at once?

Covering margin calls by selling gold makes perfect sense to me. If the banksters are going to lose money, they'll take down the useless relics with them, because that's what they really want in the ultimate SGTF event.

Things should get really crazed over the summer and reach full retard America by election time.

Edit: FTM, I'm all in silver when it hits the mid-20s. 17 should be the bottom, but who really knows?

Wed, 04/04/2012 - 11:42 | 2316553 kekekekekekeke
kekekekekekeke's picture

do you sell your physical silver when you expect it to drop or do you just hold on and stack cash 

Wed, 04/04/2012 - 10:20 | 2316222 CaptainTripps
CaptainTripps's picture

PISANI is an idiot


multiple data points showing US is slowly going back into recession. we OWN the financial system..with the UK and Vatican why would problems show up here 1st?



Wed, 04/04/2012 - 10:37 | 2316288 Hedgetard55
Hedgetard55's picture

He is a disgrace to his Italian heritage!!!

Wed, 04/04/2012 - 10:43 | 2316329 LongSoupLine
LongSoupLine's picture

"What's important here is..."

I want to put an iron pipe to that head of his every time I hear it.

Wed, 04/04/2012 - 10:50 | 2316356 ThisIsBob
ThisIsBob's picture

The RUT is not the economy?
Has anybody told Ben?

Wed, 04/04/2012 - 12:09 | 2316641 Zero Govt
Zero Govt's picture

"Bob Pisani, who lately apparently has the capacity to learn just one line and just regurgitate it ad nauseam.."

Chuckle :)

..that's the same skill set required to be the US President yes?

..BTW anyone seen Joe Biden since his economic guru Jon Corzine collapsed in debt?

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