'The Vice-Like Grip Of The Bear Will Soon Squeeze The Hope From Their Gasping, Broken Bodies'

TBI ^ | 9-6-2012 | Sam RoT

[blam]

ALBERT EDWARDS: 'The Vice-Like Grip Of The Bear Will Soon Squeeze The Hope From Their Gasping, Broken Bodies'

Sam Ro
Sep. 6, 2012, 6:12 AM

Albert Edwards, the consistently bearish strategist at Societe Generale, just published his latest note to clients. And his message is as dark as ever.

"The resilience of the US equity market in the face of a rapidly deteriorating profits backdrop points to continued high levels of investor hope," Edwards wrote. "The vice-like grip of the bear will soon squeeze the hope from their gasping, broken bodies."

He points to many of the same concerns that have alarmed most bears: the U.S. nearing recession, the Fed's inability to stimulate the economy, and China heading toward a hard landing.

However, Edwards is particularly worried by the latest U.S. durable goods report:

But the metric which really stood out for me over recent weeks was a truly awful US durable goods report. For although the headline July data rose by over 4%, both mom and yoy, the core measure of new orders has slumped (core is capital goods orders excluding the volatile aircraft component). Core orders fell 4% in July mom and 6.2% yoy. July was not a one off. This is now the fourth month out of the last five that core new orders have fallen sharply and is entirely consistent with the rapidly deteriorating profits backdrop.

Edwards warns that if it is true that the U.S. is in recession, then stocks are about to collapse. Emphasis ours:

For as I suspect, this is further evidence that the US economy has already entered recession, it will not be long before the US equity market reacts.

(snip)

[blam]

"Irrespective of any prospect of QE3, the market will not resist this recessionary data for long. The S&P will be led hand-in-hand by the economic cycle over a cliff into free- fall. That will be the third phase of this secular valuation bear market."

[blam]

The DJIA is up 210 as I type.

[Red Badger]

The S&P will be led HAT-in-hand by the economic cycle over a cliff into free- fall. That will be the third phase of this secular valuation bear market."

[NeoCaveman]

Gold & Silver have been rallying since last week.

Unlce Ben must be QE3’ing.

[blam]

[LRoggy]

Was this ‘all-knowing’ screed written before or after today’s market open?

Please, stay bearish and advise your clients to do so! It will make the coming Romney election bull market go even further!

My clients are making a fortune today . . .

[kiryandil]

Buy the market now, or be priced out forever...

[kiryandil]

Dude, you should have your clients buying Faecesbook with BOTH HANDS.

It's way undervalued at 18.95, and will probably triple in value when the DOW goes over 15,000.

**snicker**

[LRoggy]

Since most of my clients are over the age of 60 that won’t happen. Nor did we buy it at any time. Snicker all you want. Never short a dull market, it comes back to bite.

And I fully expect the Dow to clear 15,000 by the end of February if Romney wins and the Repubs take over the Senate with at least 53 Senators.

Let’s see, Stanley Black & Decker up 7% today so far. just the type of high quality U.S. company I can live with . . .

Kiryandil, when you grow up maybe you will learn how the equity markets really work.

[kiryandil]

I know full well how the equity markets really work.

I've hung out at Denninger's Market Ticker for 3 years now.

They're bearish over there, and there were quite a few who missed out on the rally from the bottom.

I don't do the market. A rigged HFT game that has Ben's thumb on the scales is a waste of time and money. Think skills and real assets. :-)

Let’s see, Stanley Black & Decker up 7% today so far. just the type of high quality U.S. company I can live with . . .

Yep. People always need a decent tool. No snicker here.

[blam]

This Market Looks Like A Buying Panic