Last month, Max Abelson wrote about a new shadow of financial pessimism creeping from academia into the mainstream. And as the subsequent weeks have seen growing fears of deflation, a dismal unemployment report and a sputtering retail market, doomsayers, says the Times, are now the cool kids of the financial world.
London investment strategist Albert Edwards predicts a “bloody, deep recession”: first a stock market collapse of 60 percent and then, as banks panic about deflation, a years-long inflation of 20 to 30 percent. And he has become a financial rock star. His recent London conference attracted 600 investors. “In many smart-money circles, listening to bears has become stylish,” the Times says.
“Nothing is ridiculous anymore,” Geneva hedge fund executive Philippe Jabre said. “There is no doubt that these days extremely negative research is being tolerated more.”
Another London strategist, Bob Janjuah, who’s even more negative than Mr. Edwards (he thinks the world’s biggest economies will grow, on average, no more than one percent a year for the next five years), got job offers, according to the Times, from six different investment banks.
JPMorgan CEO Jamie Dimon, meanwhile, is already preparing for the financial crisis of 2015.