Janjuah: Global Asset Bubble Is ‘Building’
Bob Janjuah, co-head of cross-asset allocation strategy at Nomura International Plc, discusses the outlook for the global economy. Janjuah, speaking with Erik Schatzker on Bloomberg Television’s "InsideTrack," also talks about the potential impact of further quantitative easing by the Federal Reserve on the U.S. economy, emerging-market valuations and expectations for the Standard & Poor’s 500 Index. (Source: Bloomberg)
The money quote: "People are getting sucked into the ‘buy risk’ trade, which is clearly part of what the Fed is trying to achieve." Janjuah says the problem is that people cannot yet connect the dots between QE and either housing or economic growth.
You cannot really fault that analysis by Bob. There will be further pain. This time I think insurance companies will be hit hard. Falling stock values hurts profits and low interest rates punishes their annuity businesses.
I thought it was well done too. He makes a good argument for the bears without dismissing the bulls out of hand like Rosenberg often does. He understands the momentum play as well as the fundamental arguments.