So if you’re looking for a snappy corrective — here’s a précis of the opposite view, penned by Bob “the Bear” Janjuah of Nomura:
Yet again, and certainly for the 3rd year in a row, we are being told that the US is over the worst and that a sustainable recovery is here. We are expected to believe yet another ‘decoupling’ fairytale, only this time around apparently neither Asia/EM nor the eurozone really matter to the US economy. We are highly suspect of this line of thinking! Mini business cycles are to be fully expected – as Kevin and I have said for years. This is not the same as a real and sustainable recovery. The US economy bulls very happily downplay the „post-Japan tragedy‟ very overdue pop in the global supply chain, the dangerous running down of savings by the US consumer, and the inventory build-up. I have high conviction that the US economy will be seen as a risk, rather than as a saviour, within the next quarter or two. Furthermore the potential fiscal time bomb in the US will be a big issue to consider this year, especially as the temporary payroll tax and extended unemployment benefit deals reach maturity in the next few months, and also more generally as we get closer to the US elections. A complete breakdown in politics in 2012 in Washington around the deficit and debt issues may not be certain, but the risks are, to me, worryingly high.
“…Suffice it to say that my S&P 800 target for 2012 still holds.”
Shame reversions to the mean aren’t so sexy…
Update (1415 UK time) — And for a nice to riposte to Bob, we liked these charts over at Stone Street Advisors.
I will happily position against optimism in the US economy – FT Alphaville
Will the contrarians triumph in 2012? – FT