Tuesday, February 3, 2015

Let's nail down Jeffrey Kleintop's bear call right now

As I said earlier, Jeffrey Kleintop went and spewed a bunch of doomer graffiti all over Liz Ann Sonders' latest market commentary:

Liz Ann Sonders - Kleintop decided to butt in because he thinks girls are stupid or something.

So let's nail down some of the obvious Kleintop additions to this market commentary. And remember for later, this note was dated January 30th.


We see the possibility for a decent sized correction in the US stock market for the first time in several years. We believe the secular bull market remains intact, but believe we are in a phase of heightened volatility not unlike the late-1990s. Valuation expansion has likely gone as far as possible in this environment, leaving earnings to do more of the heavy lifting. But with the aforementioned pressures on earnings, the market may have a tougher time generating the kind of gains investors have grown accustomed to.

Pretty unequivocal, no? Of course, since then the market's gone nowhere but up. Um... just like it did thoughout the late 1990s.

Along with the uncertainty regarding global growth and US Fed policy, the potential spark for a selloff could come from a crisis associated with the fall in the price of oil. With oil down well over 50% in the past six months, there are likely to be short-term negative dislocations, even if the majority of US businesses and consumers are beneficiaries.

How's oil been doing recently, Jeffy?

Remember, the plunge in oil prices in 1986 helped trigger the Savings and Loan crisis in Texas, while the dramatic drop from 1996-1998 was associated with both the Russian crisis and the Long-term Capital Management (LTCM) debacle.

Wow, he's warning us of another imminent LTCM crash or S&L crash!

Could commodities be signaling something more sinister?

Sinister, Jeffy? Really? Well, in that case, what did commodities signal today, just two goddamn days after your bearish letter came out?

But the news has not been all good. The latest durable goods report was well-below expectations, with the key core capex reading weak; the Dallas Fed survey showed signs of cracks in the Texas economy; and retail sales have been underwhelming (albeit volatile).

Yes, Jeffy! Let's use backward-looking data sets as an indication of forward problems in the economy! Because stuff and reasons!

We believe the ECB’s actions alone are insufficient to resolve Europe’s problems—due to the lack of comprehensive structural reform, and recent political shifts, as seen in Greece, towards unwinding the small progress on reform that had been made in recent years.

What's happened in Greece over the past, um, two days, Jeffy? You seem to fret a lot over what's already happened - did you know there's this thing called "the future", and the past isn't indicative of results in the future?

The head of the Eurozone finance ministers is meeting with Greece’s new Prime Minister this week, prior to the start of any formal negotiations. Greece will probably not get everything it wants, and the negotiations will likely stretch out for months before reaching a deal. A deal will likely be reached by the end of June when another tranche of needed bailout funds will be unlocked.

This has even the slightest bearing on US markets how, Jeffy?

In the meantime, the Greek banks are likely to continue to suffer.

OK, except National Bank of Greece is up 50% since you shat all over Liz's note, Jeffy.

Volatility has risen and the potential for a correction in the near term appears more likely.

I eagerly await this correction, Jeffy.

In the meantime, could you please keep your hands off Liz's work? Your clients, Jeffy, are much better served by you keeping your goddamn mouth shut and letting Liz-Ann Sonders take care of the serious analysis.

Let every daily rise from the lows of January 30th remind you of this, Jeffy.

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