"This Market's Nuts" - Toogood Sees "Shades Of 2007-2008" Because "Everybody Is Already Invested"

With stocks erasing their early-day losses and the VIX tumbling once again, CNBC - the go-to resource for retirees and other retail investors - was back to reassuring investors that this month's explosion of volatility was just another dip deserving to be bought.

But Embark Capital CIO Peter Toogood offered an important counterpoint during an appearance this morning where he warned his audience against exactly this kind of credulousness by ignoring the fundamental growth global growth story that seemingly every other portfolio manager has been relying on and instead pointing to one simple fact: "Everybody is already invested".

But even with positioning stretched to such an exaggerated degree, that doesn't necessarily mean a crash is right around the corner. Instead, Toogood foresees a "step bear market" that will continue until the PPT, newly reconstituted under the leadership of Jerome Powell, realizes that they must once again intervene...because with so much systemic debt and myriad other risks - like the dangerously underfunded pensions that we've highlighted  again and again - a sustained selloff would be far too risky to countenance.

"I noticed Dudley the other day say 'this is small potatoes' and warning investors not to worry about it. And I would accept that's all true, if everybody wasn't already invested. And I want to know who the marginal buyer of this story is. Everyone is in. Look at consumer sentiment surveys, loo at professional money managers, everyone is in. So who's the buyer? It's very 2007-2008."

He added that hedge fund managers are now "sitting around scratching their heads" because even European high yield bonds - the debt of some of the worst companies on Earth - are yielding a staggeringly low 2%.

Toogood also pointed out that stocks are breaking through important technical levels...

"You're breaking some very major levels in most markets outside of the US still, and that is very, very significant. That is the test of where you'd think a bear market is coming; I still do, just on valuation alone. I think this market is nuts," Toogood said.

Which is leaving asset managers in a bind...

"It's one of those extremely unpleasant moments when people need income but income is expensive and that's the other problem we see … We are forced into high yield (bonds) and we don't want to be there," Toogood said.'

Indeed, just on valuations alone, "I think this market's nuts," Toogood said.

Comments

Laowei Gweilo gatorengineer Thu, 02/15/2018 - 22:40 Permalink

>>> re: "And I want to know who the marginal buyer of this story is. Everyone is in. Look at consumer sentiment surveys, loo at professional money managers, everyone is in." <<<

uh

both Dalios and BofA gave reasons last week why the rally could continue PRECISELY BECAUSE so much CASH is NOT in the market yet

a huge amount of money is on the sidelines yet, that was the entire point of the Dalios 'cash' comment (which was a future prediction, not a comment on the present or past).

so what's this guy smoking

 

not saying he's wrong about the broader market direction

but if it crashes it's because everyone is NOT in ... and he's being manipulated. no cuz everyone is in. 

In reply to by gatorengineer

philipat Four chan Thu, 02/15/2018 - 18:56 Permalink

Why is ZH not covering the story that Obongo and Rice asked British GCHQ to spy on Trump Tower during the transition and possibly still now? This was revealed in a leaked memo from the Head of GCHQ to Boris Johnson, the British "Secretary of State" requesting approval for a 90 day extension "At the request of the US President" which took place AFTER Trump had been elected.

Doesn't this not only directly implicate Obongo but finally put to rest the whole "Russiagate" farce?

In reply to by Four chan

zaphod gatorengineer Thu, 02/15/2018 - 19:02 Permalink

Used to post here on ZH a lot when it first started. Will respond with the same response I used to give to these doomer articles back in 2010/11.

The market is not up, it is government fiat that is going down. This has been the solution since the financial meltdown in '08, and has been continuing for almost 10 years now.

Don't be surprised in another 10 years when the Nasdaq hits 100,000. It will. The problem is 100,000 won't buy you very much in 10 years.

In reply to by gatorengineer

new game Thu, 02/15/2018 - 18:32 Permalink

these fukers need to study up on china's CONTROLLED COMMAND ECONOMY.

new playbook fellas and gals. rules have changed, get the fuk with it.

follow the fed very bigly closely. simple shit ya dumb fuks...

 

gatorengineer new game Thu, 02/15/2018 - 19:03 Permalink

It didn't even blink at the 50 day moving average..... If bots were still running there would have at least been a squiggle at the 50 day.  They waited till the 200 day got tagged to start the presses, and have a few of the dumber sheep (like me) say ok, market stats --and what as of tomorrow 10 percent straight the fuck up?  No this ain't bots, this ain't retail.  This is GODs work.

In reply to by new game

JLM Thu, 02/15/2018 - 18:39 Permalink

Does he really not know who the marginal buyers are?  Or does he pretend to be ignorant to support his book.  Feel sorry for him if he is short. Try the Central Banks of the world and the Corporations fueled with all that QE money sloshing around.  Lots of buyers with unlimited money.  Who needs us little guys.  Party is just getting going again after a nice break.

Yen Cross Thu, 02/15/2018 - 18:44 Permalink

  I was just looking at the NASDAQ daily chart. The thing has retraced even faster than it fell.  That should be the real topic being discussed by the fake news outlets.

Rick Cerone Thu, 02/15/2018 - 21:49 Permalink

Pensioners cannot hide in any asset held by a bank.

All that money belongs to the bank (bail-In).

You'll sue???

Well, get in line behind 100 million people when the shit hits the fan.