“Everyone agrees that the Federal Reserve’s unlimited QE and the ECB’s OMT plans are historic. Both plans involve buying tremendous amounts of debt on the markets in efforts to suppress borrowing costs and ultimately stimulate economies.
Nomura contributing strategist Bob Janjuah, however, thinks that history won’t remember these actions very kindly. From his latest note to clients:
“We can now clearly see that the only solutions that are offered by the Fed and the ECB are the extension of the same failed policies that got us into our financial and economic despair in the first place. Namely MORE debt, MORE bubbles and MORE monetary debasement. When future historians look back for the day that the West lost its status as global economic superpower, and for the day that the West lost its aspirational leadership in terms of sound economic and prudent financial system management, I feel that September 2012 may be seen as a significant pivot point.”
This criticism is not unexpected by those who follow Janjuah.
However, his note also revisits his big call of the year: that stocks would rise into the fall, and then plummet by 20% to 25%.
In short, Janjuah had said if the S&P 500 rallied to 1,450, his call was off.
From his note today:”