BNP Paribas Credit Strategists Cannot Find Value In Equities

Credit strategist at BNP Paribas are out with their regular "Credit Driver", and are looking for value:

To put it another way, investors should be asking the question, which is the least overvalued asset class, which can provide returns (nominal and real) over the long term.

after some considerations (alike these), the verdict is rather straight:

Let us be clear that we are not suggesting an equity crash, though a 20% correction would be healthy for the markets, because we believe, that central banks will continue to facilitate asset price appreciation to enable weak entities to recapitalise and to diminish refinancing risk and to gradually increase consumer confidence. However, for long-term investors, there is very little value in equities.

Dare we say that equities have significantly underperformed credit, based on nominal returns over the last decade, with negative returns on a real / inflated adjusted basis (Table1). This has happened while companies and consumers were leveraging up, but now we should expect equities to outperform credit while corporates and consumers are deleveraging? This is a glaring and significant inconsistency that the equity bulls
need to resolve and we will let them come up with some creative reasoning on the cartoon network (CNBC).

Click on table to enlarge, courtesy of BNP Paribas.
I love those cartoon networks ...