The World’s Biggest Bear Calls It: “We Have Finally Hit The Peak Of The Cycle”
by Tyler Durden
ZeroHedge.com
Jul 10, 2017
Shortly after Deutsche became the latest bank to warn that “markets seem to have entered frothy territory”, going so far as to utter the dreaded “bubble” word, and suggesting that this time it will be different as “unlike 2016, the Fed does not appear to have enough patience anymore to postpone the rate hikes” and adding that “unfortunately, the Fed’s resolution to raise rates this time seems to be firmer than in 2015 because of their assessment that US economy has almost reached full employment”, one of the market’s biggest bears, Crispin Odey’s is on the verge of a premature victory lap (with his YTD performance rebounding to a loss of just -2.7%, after returning 6% in May and 2% in June, he may finally be due).
In his latest Manager’s Report to investors, Odey looks at the increasingly precarious situation in the UK, where he metaphorically summarizes the domestic economic situation saying that “The chances of car crashes everywhere are rising”, it was his comments on the US economy, and the hawkish Fed that were more interesting. Discussing the Fed’s dilemma, Odey says that “with employment growth annualising at around 200,000 per month, suddenly the Fed can no longer just keep the credit cycle moving with QE.” The implication for a world which is only used to credit expansion and has forgotten all thoughts of business cycles “this new tough Fed is unthinkable. However to my mind, we have finally globally hit the peak of the cycle. A peak we hit in 1979, 1989, 1999, 2008 and now. Can you see it? The auto industry is already going into a recession. Inventories are 30% too high because sales have fallen by 10% from where they were.”
The Rest…HERE
