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Edwards: “We are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger”

Could the uber-bear, Albert Edwards, possibly become more bearish?

Yep! From his global strategy weekly, sent out to SocGen clients:

Even as structural bears on equities over the last decade, we have never felt the confidence to lower equities to a minimum possible exposure of 30%. That ends today. This is the first time in over a decade that we have felt so very strongly that we make this recommendation. Conversely, as the world frets about inflation we raise our government bond weighting to its maximum 50%. We are not through the worst of this crisis. The worst is still to come.

This truly is the stuff of sandwich boards and loud hailers - a message that the end is nigh, delivered with sparkling prose.

Mr Edwards knows that his doggedly bearish stance has invited much derision and ridicule, but he notes that equities have underperformed 10 year government bonds over the last decade - “And that is even before the current equity bear market.”

Some nuggets:

- We are trying to give our readers the strongest possible warning (ever!) that we are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger.

- We see a global recession unfolding. Nowhere and nothing will be immune.

- One of the clearest impressions that I will take away from working in this industry is how darned bullish everyone wants to be. To be sure, nobody likes to be a party-pooper but the bias towards optimism in this industry is truly staggering…I have found recent hope that

This entry was posted by Paul Murphy on Friday, May 9th, 2008 at 12:57 and is filed under Capital markets. Tagged with . You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Comments

  1. May 09   21:17 Posted by Aktier å sånt enligt PN » Blog Archive » Societe Generale stämmer in i min klagosång.. [report]

    […] We are trying to give our readers the strongest possible warning (ever!) that we are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger.- We see a global recession unfolding. Nowhere and nothing will be immune.- One of the clearest impressions that I will take away from working in this industry is how darned bullish everyone wants to be. To be sure, nobody likes to be a party-pooper but the bias towards optimism in this industry is truly staggering…I have found recent hope thathttp://ftalphaville.ft.com/blog/2008/05/09/12922/edwards-we-are-on-the-cusp-of-an-equity-meltdown-that-will-slash-and-shred-portfolios-like-freddie-krueger/?source=rss […]

  2. May 09   14:58 Posted by Paul Murphy [report]

    Kamekon — that is a FANTASTIC link.

    thank you for that.

    Murphy/Alphaville

  3. May 09   14:47 Posted by Société Generale warns: an equity meltdown is coming « de(e)pre(ce)ssion [report]

    […] Société Generale warns: an equity meltdown is coming Edwards: “We are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger” […]

  4. May 09   14:04 Posted by Kamekon [report]

    The Word - on feeding up rabbits: have you been advising Unicredit?

    http://www.unicreditgroup.eu/en/profilo/comunicazione/campagne_pubblicitarie/pdf/maybe_2.pdf

  5. May 09   13:50 Posted by TheWord [report]

    Wll, if you cry wolf often enough, eventually the wolf turns up.

    Will it be this time? I don’t know. What I do know is that the banks, pension funds, etc. around the world have been feeding the wolf super-growth food. It’s now a bloody enormous wolf, chafing to get out there and do what wolves do.

    The monetary authorities have belatedly realized that the wolf-lovers have been sneaking out in the early hours of the morning to feed the wolf.

    Hell! Better do something! What?…I know - let’s get a rabbit and feed it up until it’s the same size as the wolf. Then, when the wolf breaks free, it’ll eat the rabbit and not us!

    Sounds good, yeah? Couple of small problems.

    First, feeding the rabbit up to the size of the wolf took all of our salaries and all of our savings. Unfortunately, while it satisfied the wolf’s hunger for a short while…it became hungry again, and it turned and looked at us.

    But don’t worry. This is just a fairy-tale.

  6. May 09   13:19 Posted by t2k [report]

    Looks like some huge opportunities for PE to grab the best companies (especially Techs) and leave the others to the vagaries of depressed markets.

  7. May 09   13:08 Posted by VP [report]

    Great headline. Will be a lot in agreement - just a pity you “can’t buck the market”…

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