The confirmed bears on economy, the economists from Morgan Stanley, had a short message yesterday. Richard Berner, the co-head of Morgan Stanley' s Strategy Forum, among others, wrote:
Investors should not rush in. From a market perspective, we know that pessimism is rampant and that good news should help risky assets. Investors are right to look for signs of relief, especially when talk of depression is now fashionable and many are giving up hope. But we’ve been here before: In February, the twin mantras seemed to be that “the market is short” and “the pain trade is higher.” Now that equities stand at 14-year lows and 55% below their October 2007 highs, they do reflect a lot of bad news − but maybe not quite enough. The further slide in production that we expect suggests that the near-term risks for earnings point down, and a rapid turnaround seems unlikely.
Consider as a probability!
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