28/05/17

Citi: "We Have Only Seen This Market Anomaly Twice Before: In 1999 And 2006" [feedly]



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Citi: "We Have Only Seen This Market Anomaly Twice Before: In 1999 And 2006"
// Zero Hedge

With one bank after another - including Goldman, JPM and BofA - quietly urging investors in recent weeks to head for the exits in a time when the Fed is not only hiking rates but warning about "vulnerabilities from elevated asset positions", over the weekend the latest bank to join the bearish chorus was Citi, and specifically Jeremy Hale's cross-asset team, which in a moment of surprising honesty writes that "eight years into the cycle - and one where QE has been the asset market driver – virtually every market appears rich", including stocks, bonds and credit.

According to Hale, this pervasive lack of value "presents the biggest challenge in setting medium term asset allocation tilts" and reminds his readers that as a result he has adopted a fairly defensive approach to the reflation trade, by going overweight cash.

More important still is his observation that at this juncture, even Citi's own internal projections have become contradictory, and notes that "views and the input forecasts from our ...

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