Loading ...Three days ago we posted a prescient note by one of BofA’s only worthwhile strategists, Michael Hartnett, who warned that the market “Ominously Hints Recession Imminent” Unless “Unambiguous Pessimism” Leads To Stock Rally.” Since then things have gone from bad to worse, because not only are market participants still extremely pessimistic, they just saw the Fed do the most dovish announcement in years, only to see the market selloff further, thus adding to their pessimism, and brings us one step closer to the “recession” and “default” hinted earlier in the week.
So is a recession imminent? According to Hartnett, the answer is simple: if despite the massive pessimism overhang and the dovish Fed, the market can’t stage a rebound, the answer is a resounding yes.
That’s not all. In a note titled “The Fed Blinks”, Harnett does a FOMC post-mortem in which he observes, correctly, that the “Fed admits China/Wall St threatens to reverse Main St recovery”, in other words Wall Street, as in Goldman, won, Main Street lost. As usual.