Friday, May 1, 2009

Merrill's Rosenberg new screed

Merrill's Rosenberg has a new piece. Here are parts of it.

It’s time to set the record straight

We acknowledge that we have felt like salmon swimming upstream. And, we constantly preach that everyone should keep an open mind and about the dangers of being perma-bears at the low (not our intention!) – but it’s time to set the record straight.

Big money investors have been on the sidelines

We have talked to so many bewildered clients about the massive equity market rally from the March lows that we’ve lost count. Few, if any (especially in the hedge fund community) seem to be celebrating the fact that the S&P 500 has rallied 30%, which tells us that big-money investors have been on the sidelines through this entire move.

Few market-makers share enthusiasm of most economists

We don’t really share the view that the recovery, if and when it comes, will be sustained.

By and large, this rally has been a clear technical event

Gaps get filled rapidly and the primary source of buying power seems to be coming from a huge short-squeeze, and perhaps some pension fund rebalancing, which always seems to happen after the market makes a new low...

Green shoots can turn into a dandelion or a beanstalk

We are more impressed with solid roots than we are with green shoots. The economy and the capital markets are being held together by tape and glue, in our view. Private sector activity is contracting and will continue to lose its share of GDP as the government’s influence rises on a secular basis....

You can read the rest of it here. It's a nicely written piece, but it will cost you money.

But I like Rosenberg's choice of words "Green shoots can turn into a dandelion or a beanstalk."

All these bears that want us to worry about "Giants" should instead be worrying about the beanstalk that grows to the sky!

Roubini thought he was clever, intoning, while the world sees "green shoots" he sees "yellow weeds!" How appropriate. The most common yellow weed is a dandelion, the traditional medication for constipation! Instead of throwing tea bags over the White House fence, maybe somebody better send some dandelion tea bags to Wall Street! Let's have a Wall Street tea party with David Rosenberg, Meredith Whitney and Nouriel Roubini as the invited guests!

At least we have one guest at the tea party!

Make sure the rabbits come too!

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