It seems like it was only yesterday [technically it was September] that David Bianco "departed" his latest employee, Bank of America, where he landed following his "departure" from UBS back in 2007. Today, courtesy of Business Insider [17]we learn that following an extended garden leave, or just a rather choppy job market, Bianco his finally found a new happy place: right in the cave of joy and happiness, also known as Deutsche Bank (aka the bank whose assets are about 80% of German GDP and which recently 'magically [18]' recapitalized itself). Here he will be joined by the two other pillars of perspicacity - Binky Chadha and Joe LaVorgna. What to expect? Who knows - but lots of twisted humor is certainly in store. For the sake of simplicity we present some of the salient soundbites from Bianco and his colleagues over the past 5 years.
David Bianco:
November 7, 2007 - S&P at 1354: "Bianco, 32, wrote in a Nov. 9 research note that stocks are inexpensive and said the Fed will reduce its benchmark lending rate to 3.5 percent next year from 4.5 percent now. The central bank cut borrowing costs from 5.25 percent in the past two months to keep the housing slowdown and losses in bond markets spurred by mortgages to people with patchy credit from dragging the economy into recession. ``The market's priced for a U.S. recession,'' New York-based Bianco said during a conference call last week. "We don't think that's the case, and we believe the earnings are going to prove to be far more resilient than most people realize." [Bianco says] low equity valuations, overseas growth and the prospect that the Federal Reserve will cut its interest rate target for overnight loans between banks can lift the S&P 500 to a record 1,600 this year." Source - Bloomberg [19]
March 18, 2008 - S&P at 1230: "[A Joseph Cohen's] year-end forecast for the S&P 500 at the beginning of 2008 was second only to the prediction of 1,700 from Bear Stearns Cos.'s Jonathan Golub, HSBC Holdings Plc's Kevin Gardiner and UBS AG's David Bianco. Source - Bloomberg [20]
July 7, 2008 - S&P at 1,162: "The S&P 500's rebound "is going to be one of the greatest roars we've seen,'' Bianco said. "The market has way too many fears baked into the valuation right now. The fear out there is the earnings are about to collapse and interest rates are about to surge on inflationary fears. Neither is going to happen. "... "David Bianco at UBS says the index will increase at least 25 percent."... so make that 1450. Source - Bloomberg [21]
October 6 -2008 - S&P at 980: "UBS strategist David Bianco cut his 12-month price target on the Standard and Poor's 500 Index .SPX to 1500 from 1650 on fears of a deeper recession from financial-system strains choking credit availability to the economy. Bianco also suspended his 2008 year-end target of 1550 on the index "owing to its proximity amidst extreme uncertainty and volatility." Bianco slashed his 2008 earnings outlook for the index to $74 a share from $80 a share on increased financial asset write-downs and difficult consumer and other macroeconomic conditions in the second half of the year. But he added that the S&P 500 index is significantly oversold and appreciation from current levels is likely by early next year even with greater-than-normal investor risk aversion." Source - Reuters [22]
December 3, 2008 - S&P at 816: "Global stocks will withstand a “full-blown” recession and surge in 2009 as cheap valuations and efforts by governments to restore confidence in the financial system lure investors back to equities, UBS AG said. The Standard & Poor’s 500 Index, which tumbled 42 percent to 848.81 this year, may rally 53 percent to 1,300 by the end of 2009, David Bianco wrote in a note dated yesterday. The New York-based strategist, who a year ago predicted a 2008 advance of 16 percent for the S&P 500, is now forecasting a gain that would exceed the index’s best annual performance on record." Source - Bloomberg [23]
July 7, 2010 - S&P at 1028: "Merrill Lynch strategist David Bianco is doing his best imitation of a Civil War admiral in the face of increasingly treacherous U.S. economic waters: Damn the torpedoes, full steam ahead! Despite the decision by his own firm's economists to slash their 2011 forecast for U.S. gross domestic product growth to 2.6 per cent from 3.3 per cent, Mr. Bianco said he is sticking with his S&P 500 earnings-per-share target of $88 for next year - representing growth of 10 per cent over his 2010 forecast, and almost 40 per cent above the S&P 500's actual earnings in 2009. Mr. Bianco also held firm on his 12-month price target of 1,350 for the S&P 500 - almost 30 per cent above current levels." S&P closed at 1250 and only following the launch of QE2. Source - Globe and Mail [24]
September 12, 2011 S&P at 1,153: "Just when one thought Wall Street could not become more full retard, here comes David "Kermit" Bianco who, perfectly oblivious of the world ending one broke European country at a time, has just released the following: "S&P 500 2011 year-end target remains 1400, 12-month target raised to 1450 from 1400 12-month target raised on time value and conviction in 2012 EPS being ~$100 barring recession." 2011 closes at 1250 only after ECB expands balance sheet by €600 billion Source: Zero Hedge [25]
David Bianco is fired on September 14, 2011 - Source - Zero Hedge [26]
...
And some soundbites from his other colleagues.
Binky Chadha:
December 11, 2006 - S&P at 1416: S&P at 1540 "The year ending December 31, 2007 will close at 1540". S&P closes year at 1346 - Source [27]
July 7, 2008 - S&P at 1,162: "Binky Chadha, Deutsche Bank's New York-based chief strategist, says the S&P 500 will end the year at 1,650, up 29 percent from June 30." He was off by juuuuust this much. Source - Bloomberg [21]
December 14, 2010 - S&P at 1,215: "The strategic and tactical cases for US equities should come together to generate strong market returns in 2011. The S&P 500 YE 2011 target remains unchanged at 1550" S&P closes at 1250. Source - Zero Hedge [28]
As for Joe LaVorgna, the below chart comparison of Joe's track record with that of Groundhog Phil says it all (courtesy of John Lohman):
[29]
To summarize it all, we use Peter Sorrentino's famous remark [21]: "A monkey with an abacus is probably better at the end of the day"