Click For Photo: https://www.zerohedge.com/s3/files/styles/max_650x650/public/2019-09/albert%20edwards%20sitting%20teaser.jpg?itok=jyLAF2vy
Back in August, we wrote that after decades of waiting, for Albert Edwards vindication was finally here - if only outside the US for now - because as per BofA calculations, average non-USD sovereign yields on $19 trillion in global debt had, as of Monday, turned negative for the first time ever at -3bps.
Of course, it ain't easy being a permabear - even when your global "Japanification" thesis, 30 years in the making, has been validated - for the simple reason that there are haters always and everywhere, and for some odd reason Edwards decided that responding to them in his latest letter is a prudent use of his time. In this particular case, Edwards takes umbrage at the criticism of a fellow "financial advisor" who inexplicably, spends more time on CNBC and on twitter than, well, providing financial advice, but that's Albert's prerogative (our advice: ignore them).
Edward - Message - Tangents - Points - Edwards
So instead of diluting Edward's message with trivial tangents, we focus on several key points, the first of which is why if Edwards got the bond bull market so spectacularly right at a time when virtually everyone remains short bonds...
... has he been wrong on stocks, with his calls to short the equity market, which is also explains the genesis of his "permabear" moniker (alternatively, Edwards is the biggest bond permabull in existence). This is what Edwards said:
Ice - Age - Mistake - US - Japan
... my biggest Ice Age mistake was to assume that the US would be like Japan and that subsequent to the 2008 GFC, US policymakers would find it much harder to manipulate the economic and credit cycles. I thought we would return to normal economic cycles with lengths nearer to 40 months.
And if I was right, perceptions of increased EPS volatility would cause the equity or cyclical risk premium to rise ie the increased volatility...
Wake Up To Breaking News!