Shame on you Mr Dylan Grice

My collaegue Hendrik Jan has annoyed seriously überbear (ursus major) Mr Edwards of Socgen and his side kick Dylan Grice with his reaction that Dylan Grice as super bear suddenly adviced to buy equities of Emerging Markets. No, even not equities but call options.

The reaction of Edwards was this weak a piece with the same title as Hendrik Jan had sent to us (Shame on you Mr Dylan Grice) (in which he had written among other things: I will not bore you to death with his previous recommendations, but instead summarize his view and that of his close colleague, Albert Edwards for the last year: we are all toast, extra crispy. Equities would fall, as would earnings, the double recession was around the corner, etc etc.

You can probably guess how Dylan squares the circle: the Fed's new round of quantitative easing. Huh? This is coming from the same guys who brought you the balance sheet recession which would "depress growth for at least a decade". Or the wonderful: "the Fed is pushing on a string". The best question to ask him is "would emerging market equities not have risen if the Fed did not do QE2").

Edwards started this week with: “A very good client complained that we were doing a U-turn, ditching our previous Ice Age bearish stance on equities and becoming vastly more bullish – using QE as the excuse. And to be fair, Dylan’s last two notes, suggesting that the Nikkei could go to 63 million in 15 years and that emerging markets could double, might be construed as being a tad bullish. In this note I will make MY view crystal clear and tie it into Dylan’s recent work”.

Edwards is insulted because he is still bearish: he underwaits equities with 25% (this not yet producing very favourable results for the time being). That double dip will arrive, no doubt about it and those people from ECRI that suddenly said last week that no way we will get a new recession are misunderpretating the facts edwards says. In 2008 you had also a tremenedous liquidity push and that was not helping, so this time it also will not rescue us. Edwards included some more pictures (see above) in which he makes the call of Grice even stronger to buy Emerging Markets.