Via Credit Suisse:

We think we are entering the 2nd Phase of the Bull Market for risky assets given:

1) Global growth is bottoming out from the summer slowdown and is poised to move higher over the next few months;

2) The Fed policy regime is likely to be very accomodative for an extended period of time and

3) The eventual recovery in the services economy will add duration to economic growth beyond the typical short and violent Industrial Production bounce.


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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Goldfinger

    Are they excluding US, EU and Japan from their growth predictions?

  • Tom Hickey

    Where is the demand coming from? Income? Savings? Debt? Asset sales?

    Or do they expect nominal growth due to inflation?

    BTW, the preliminary Cat Food Commission report is out.

  • Mountaineer

    Blah, what nonsense are you spewing? Those economic midgets only account for over 60% of global GDP. Why worry about them when you can hyperventilate on the growth prospects of Singapore! What, you say Singapore’s economy is only slightly larger than Alabama’s? You just don’t understand! Can’t you see I’m trying to help you! Now, hurry up and go buy some LVS on margin before its too late! The trading day is almost over! See that dip? Buy it!

  • Mountaineer

    Thank you, I’ve been looking for the PDF. Cat Food Commission looks about right…

  • B Ferro

    Not sure I’ve ever seen a market where it is seemingly so easy to make money on the long side. I keep telling myself it can’t be this easy, but it seems to be.

    Side note – check out JNK, HYG, LQD, etc. – all breaking major trend lines to the downside, all good leaders of equities over the past year.

    As I noted before also, muni funds breaking down in a big way…

    And per CS above – I was also taught that cyclical bull market rallies top out at 75% on average. Funny they don’t think the same after the 80% rally off the 09 lows.

  • LVG

    Cuts of $200 billion over 4 year doesn’t seem like much.

  • David

    I noticed that with the muni closed end funds, what’s up with that. Muni’s have been pretty strong recently relative to treasuries and I couldn’t find any press releases to why the cef’s were getting hammered. Any reason other than more sellers than buyers? Just curious.

  • making sense

    though in general I am optimistic towards the future, but this global recession is not a usual one. it is a result of a global imbalance built during the past half century, and I believe we are far from out of it.

    past economic booms were built on debt, current recovery is built on global stimulus, borrowing and money printing, even for China. So I am not sure we are in another leg of the bull market. I understood Dow can go 36000 if we inflate, but the number alone does not always make sense.

  • AWF

    Hey B Ferro—I’m not seeing a “Major Trendline” break in either JNK or HYG

    BTW both are above 10Wk & 15Wk EMA’s and tactically look OK

    Bond/Bond confidence prefers RISK = example= JNK , HYG

    It appears to me that CS has missed the 2nd Phase (Down) of April to July of this “Bull Market”–looks like we are now in the 3rd Phase (UP) Phase.

    This post is just a shout out to the “Wavers”

  • B Ferro

    I’m calling out all the intermittent rallies in JNK over the past year that broke below upward sloping trend lines and portended more weakness to come, including equities…as of yet HYG has yet to break below but JNK did today and LQD did last week…

    As far as the munis go not entirely sure…there was a WSJ story this morning highlighting how munis are increasingly willing to go the default route and I also saw Harrisburg finally chose its workout lawyer for the $300M it is going go BK on…

    Other than that not sure…