Bob Janjuah is ‘tactically bearish’ now
Nomura’s Bob Janjuah was on Bloomberg Television’s "Inside Track" with Erik Schatzker this morning, discussing his outlook as well as the crises in the U.S. and Europe. He opened the session by saying he is tactically bearish over the next two to three months after the recent Santa Claus rally in shares and commodities. He’s looking for a ten percent correction in U.S. equities.
Janjuah is focussing on three themes for 2011:
- Is Asia gong to slow down? If so, will it be a hard or soft landing and what are the global implications? Janjuah thinks it would.
- Is Europe closer to the end-game i.e. will we need another crisis to get beyond the European debt problem? Janjuah says Europe seems close to the end game.
- How sustainable is the U.S. economic recovery? Janjuah says he sees a repeat of the 2010 slowing and renewed quantitative easing.
Watch the video to understand how he comes down on these issues and the implication for different asset classes and asset allocation overall.
I agree very broadly with his analysis. Though I disagree about Europe. If as he says that the ECb realise that this is a solvency problem then that is a great step forward. The problem is that many banks are insolvent and are hoping to trade their way out of the problems. I also think that a Irish debt default will become increasingly likely. Which the markets may hate but the public there will love. If Ireland recovers quickly then expect Greece, Portugal and others to follow suit, banks will lose billions.
I agree very broadly with his analysis. Though I disagree about Europe. If as he says that the ECB realise that this is a solvency problem, then that is a great step forward. The problem is that many banks are insolvent and are hoping to trade their way out of the problems. How that us dealt with will be crucial.
I also think that a Irish debt default will become increasingly likely. Which the markets may hate but the public there will love. If Ireland recovers quickly then expect Greece, Portugal and others to follow suit, and then the banks will lose billions.